Senior exec says major spending planned on infrastructure and projects to maintain oil capacity
Saudi Arabia's state-owned oil giant Aramco plans to invest a total of about $334 billion by 2025, including spending on infrastructure and projects to maintain oil capacity, a senior Aramco official said on Monday.
Abdulaziz al-Abdulkarim, vice president for procurement and supply chain management, told a conference in Bahrain that the figure included spending on exploring for and developing unconventional resources, such as shale gas.
"Saudi Aramco is forecast to spend around $334 billion. This will be spent on material and services to support service facilities, infrastructure projects, drilling and maintain (oil) potential projects, unconventional resources both in the exploration phase and development and several other projects," he told the conference.
"That is the 10-year investment. It's everything. You talk about pipelines, you talk about bulk plants, you talk about power plants, there is a lot of investment, of course upstream facilities whether it's oil or gas," he later told reporters.
Saudi Aramco outlined a plan known as In-Kingdom Total Value Add (IKTVA) last year, when CEO Amin Nasser said the company would spend more than $300 billion over the next 10 years, of which 70 percent would be local content.
One of IKTVA's goals is to double the percentage of locally produced energy-related goods and services to 70 percent of the total spent by 2021.
Saudi Arabia has announced its "Vision 2030" plan, aimed at ending the kingdom's reliance on oil, including a proposed conversion of Aramco into an energy holding company and selling up to 5 percent of the company in an initial public share offering (IPO).
"Some companies as a matter of fact have already moved early, quickly and smartly," Abdulkarim said at the conference.
"In the past few months we have seen Schlumberger, General Electric and Siemens explain very robust IKTVA plans as their contribution to the Saudi Arabia Vision 2030," he said.
The local sourcing target comes at a time of significant financial stress in Saudi Arabia, as the Gulf's largest economy adjusts to lower oil prices and reduced state spending and economic growth.
As part of its local focus for the supply chain, Aramco aims to create around 500,000 direct and indirect jobs for Saudi nationals.
In its drive to boost local industry and create jobs, Saudi Aramco also plans to develop an energy industrial city between Al Ahsa and Dammam which includes manufacturing oil and gas equipment and drilling centres for Aramco.
Abdulkarim's speech referred to the city as to be located in Abqaiq.For all the latest energy and oil news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.