Aramco has signed 59 corporate procurement agreements (CPAs) with 51 local and global manufacturers, with potential to create 5,000 new jobs in the Kingdom of Saudi Arabia over the next decade
The agreements, valued at US$11bn, are expected to reinforce Aramco’s robust supply chain and result in the development of materials manufacturing facilities in the Kingdom. They cover multiple strategic commodities, such as drilling chemicals, wellheads, switchgears, vibration monitoring systems, pipes, compressors, structure steel, fittings and flanges, and air-cooled heat exchangers. Among the companies signing the agreements were Baker Hughes, Cameron Al Rushaid, Halliburton, SLB, and TechnipFMC. The CPAs fall under a strategic pillar of the Aramco in-Kingdom Total Value Add programme (iktva), where they are used to establish long-term agreements and commitments with supplier partners.
Ahmad A. Al-Sa’adi, Aramco senior vice president of Technical Services, said, “Our significant investments in a network of accomplished local suppliers strengthens Aramco’s resilience, ensuring that we remain the world’s most reliable energy company. We are also extensively building commercial ecosystems globally by partnering with some of the world’s top energy, logistics, and manufacturing companies.”
Under their CPA agreements, supplier partners agree to establish local facilities, transfer technology, perform local research and development, and develop the local workforce and supply chain, while gaining preferred status with Aramco, Aramco joint ventures, and affiliates.
Since the launch of the CPA pillar, Aramco has entered into more than 100 CPAs. These strategic agreements have driven localisation in critical commodities such as drill bits, downhole, valves, pressure vessels, and process automation systems. In addition, some CPA holders now export materials globally, while providing Aramco with the capacity to embark on the most robust project portfolio in the company’s history.