Aramco signs 15 MoUs worth $34bn with business partners at Future Investment Initiative

Saudi Aramco participated as a strategic sponsor in the second annual Future Investment Initiative (FII) 2018, a key gathering of senior global and domestic business and policy leaders held in Riyadh under the patronage of the Custodian of the Two Holy Mosques King Salman bin Abdulaziz.

Amin Nasser (left), president and CEO, Saudi Aramco, With Patrick Pouyanné, CEO of Total, at the Future Investment Initiative 2018, held in Riyadh.
Amin Nasser (left), president and CEO, Saudi Aramco, With Patrick Pouyanné, CEO of Total, at the Future Investment Initiative 2018, held in Riyadh.

The Future Investment Initiative was an occasion for domestic and global influencers to engage in discussions on a wide range of topics related to the kingdom’s economy, and the opportunities for business collaboration between Saudi and international business entities from several economic sectors.

Commenting on the company’s participation at FII, Amin Nasser, president and CEO, Saudi Aramco, said: “Saudi Aramco is proud to be a strategic partner in the Future Investment Initiative. We seek to be an active participant in the design of the economic future and standing of the kingdom, not only domestically but also internationally.”

“The company is a leading supporter of Saudi Vision 2030 by helping to diversify the local economy, adding more value domestically, assisting in kingdom industrialisation, promoting job creation, helping in national capacity building, and promoting entrepreneurship.”

The Future Investment Initiative is an ideal and beneficial platform to attract international investments and to capitalise on new opportunities that are fast emerging with Saudi Vision 2030. Saudi Aramco is playing an integral role, alongside many national entities and stakeholders, in enabling new industrial and business partnerships in the kingdom, thanks to its position as a global energy powerhouse, and as reflected in our major investments and partnerships globally, not only in core oil and gas and downstream, but also in pursuing advanced technologies and energy-related value adding activities,” Nasser added.

The Saudi Aramco president and CEO said that the pace of reforms in the kingdom has picked up tremendously and is multifaceted. The reforms have led to significant progress and positive change in a short period of time. The future of investment in the kingdom is promising.

According to Tadawul, the Saudi economy has greatly improved its economic and business rankings. For example, the rating agency Moody’s has maintained Saudi Arabia’s A1 positive rating with a stable outlook. It also increased its economic growth estimate for 2019 from 2.5% to 2.7%, which reflects a healthy economy on a pattern of steady growth.

In addition to that, according to the World Economic Forum 2018 Global Competitiveness Report, the Saudi economy saw major improvements in its overall position and the ease of doing business. The report ranked the kingdom 39th on its list of 140 economies, achieving its best progress since 2012.  The Saudi financial market governance index has moved up to 5th position in 2018 from 77th in 2017, showing the best performance among Arab countries, and the second best among the G20.

At the FII, Saudi Aramco signed 15 Memoranda of Understanding (MoUs) and strategic and commercial collaborations valued at $34bn with 15 international partner companies and entities from eight countries in three continents. These collaborations reflect the range and ambition of Saudi Aramco’s interests, securing its status as the world’s preeminent energy and chemicals company.

The MoUs reflect both Saudi Aramco’s and the kingdom’s international partnership strategies and the determination to diversify the economy, enhance the domestic investment environment and boost employment opportunities. The MoUs support Saudi Aramco’s forward-looking strategy across business units, including downstream, offshore, and engineering. It engages with companies representing eight countries, including major businesses in France, China, the US, Japan, the UAE, the United Kingdom, South Korea and India.

A number of these MoUs will enhance the in-kingdom total value add (iktva) programme, Saudi Aramco’s flagship initiative to improve the domestic supply chain, its operations and its employment potential, through greater commercial engagement with Saudi businesses.  Iktva’s localisation objective is to achieve 70% of locally supplied goods and services by 2021.

In the area of job creation, Saudi Aramco has proactively pursued opportunities to pilot the high-value job creation in the kingdom, increasing opportunities for Saudi citizens over the next 10-15 years with anchor projects, including the King Salman International Complex for Maritime Industries and Service in Ras Al Khair, which will generate in the region of 30,000 direct and 50,000 indirect jobs.

The MoUs and commercial collaborations signed are: (1) MoU with Total to launch engineering studies to build petrochemical complex in Jubail, KSA; (2) MoU with Total regarding the potential establishment of a retail service station network; (3) MoU with Hyundai Heavy Industries (HHI) regarding potential HHI investments in King Salman International Maritime Complex for Industries and Services at Ras Al Khair; (4) MoU with Baker Hughes GE; (5) MoU with Schlumberger; (6) MoU with Halliburton; (7) MoU with Oilfield Supply Center; (8) MoU with Flex-Steel to invest in RTP reinforced thermoplastic pipe facility; (9) MoU with National Petroleum Construction Company (UAE) to invest in a fully integrated fabrication yard and marine base; (10) MoU with SeAH Changwon Integrated Specialty Steel Co Limited to invest in localisation of engineering steel; (11) MoU with GumPro (India) to invest in drilling chemicals facility; (12) MoU with Acwa Power (KSA) and Air Product (USA) regarding  the Jazan Refinery gasification power project; (13) MoU with Sumitomo (Japan) regarding potential investments to upgrading Petro Rabigh refinery; (14) MoU with Norinco (China) regarding potential investments in refining and chemicals projects; and (15) MoU with NOV (USA) to invest in manufacturing and repair of onshore rigs and equipment.

Saudi Arabia’s infrastructure, both physical and digital, has witnessed an extraordinary advancement. This is integral to today’s advanced industrial activities. It attracts investors and enhances the fundamental competitiveness of the Saudi economy.

Nasser said: “These agreements support investments in strategic sectors, which will further expand the company’s business portfolio while they contribute to the realisation of Saudi Vision 2030. The MoUs will contribute to such areas as refining, chemicals, conversion industries, localisation and related new investment and training opportunities, and job creation. They will also help enable a vibrant energy services sector through the development of the King Salman Energy City, an anchor project which will increase the efficiency and reliability of the supply chain capabilities of the company and that of the kingdom’s industrial base.”

Saudi Aramco Chief Technology Officer Ahmad O Al-Khowaiter participated in a panel discussion on   ‘Energy’. Highlighting the company’s technology research and development efforts, Al-Khowaiter said: “The main focus of Saudi Aramco’s investment in R&D is to ensure that we are providing reliable access to affordable energy in a responsible way”, adding that “technology has been and will continue to be absolutely critical to the company’s long-term strategy.”

Al-Khowaiter said that Saudi Aramco is on track to becoming a global R&D powerhouse, creating ground-breaking energy and chemical technologies. “We are building leading technological capabilities. Last year, Saudi Aramco was granted 230 patents, which is four times as many as we were granted in 2013. We have doubled the number of scientists in our labs to 1,300 and we have intensified our R&D centres by opening nine new research centres around the globe.

Saudi Aramco technology and R&D innovations were on display at the FII Marketplace, where visitors were able to learn from the company’s scientists and engineers about the latest technological innovations such as the advanced internal combustion engine efficiency programme, the carbon capture utilisation and storage initiatives, the gas leak detection and repair programme, and the direct conversion of crude-oil-to-chemicals programme.

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