Schemes being implemented under the Saudi Vision 2030 masterplan are accelerating the kingdom’s socio-economic transformation drive.
State energy company Saudi Aramco aims to reshape the kingdom’s energy sector through its In-Kingdom Total Value Add (IKTVA) programme.
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Aramco is working to meet an IKTVA goal of achieving 70% local content generation by 2021.
At IKTVA Forum, taking place at Dhahran Expo Centre on 24-25 February, Aramco is expected to roll out 170 new investment opportunities with an annual market value of $14bn.
Aramco holds the IKTVA conference and exhibition as an annual event to promote the scheme to investors and business partners.
IKTVA results
The objective of IKTVA is to ensure that the capital expenditure that Aramco continues to make on projects and expansion plans feed back into the national economy, as well as to create growth opportunities for associated industries and to increase employment.
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By GlobalDataAramco launched the IKTVA campaign in December 2015. Since then, the local content generation has been structured and swift. Localisation levels reached 35% in 2015, 37% in 2016, 45% in 2017 and 52% in 2018.
At the 2018 IKTVA Forum, Aramco signed $27.5bn-worth of contracts with 31 companies.
The company will reveal its 2019 local content generation score at the 2020 IKTVA Forum.
In a presentation charting IKTVA’s progress, Aramco said suppliers’ spending on local services and products have increased more than three times since the programme’s launch in 2015.
Suppliers’ spending on compensation paid to their Saudi employees have doubled compared to their spending before IKTVA, ‘which means an increase in the employment of Saudi citizens at all career levels’, according to Aramco.
IKTVA has helped to attract 468 investments from 25 countries with a capital expenditure of $6.5bn. The investment has resulted in 44 factories being built, while 64 other industrial facilities are under construction.
Aramco revealed 50 strategic purchase agreements worth $29bn have been awarded so far, which will lead to the establishment of 21 local factories and the expansion of another 29.
The new local investment opportunities Aramco is promoting at the 2020 IKTVA Forum specifically relate to two master energy industrial developments in the Eastern Province:
- King Salman International Complex for Marine Industries and Services in Ras al-Khair
- King Salman Energy Park (Spark).
The King Salman maritime complex will meet Aramco’s requirements in the areas of manufacturing, maintenance, repair, and refurbishment of offshore gas and oil platforms and shipbuilding industries.
In addition to boosting local content generation of the maritime manufacturing space, repair and services capacity, the Ras al-Khair project will create 7,000 jobs and achieve 60% Saudization by 2030.
While some units of the King Salman complex are set to be brought online earlier, the facility is expected to be ready for commercial operations in 2022.
Spark will become a hub for oil and gas services, manufacturing and research, attracting both local and international companies.
Several local and foreign oil and gas service companies have already committed to investing in and setting up manufacturing bases at Spark.
This article is published by MEED, the world’s leading source of business intelligence about the Middle East. MEED provides exclusive news, data and analysis on the Middle East every day. For access to MEED’s Middle East business intelligence, subscribe here
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