Saudi warms to US involvement

RIYADH, May 22, 2017 – Saudi Arabia moves forward towards completing its economic vision for 2030 with the signing of a plethora of domestic deals worth around USD 50 billion and agreements for projects on American soil with US oil and gas players on Saturday.

The deals included a series of joint works between Saudi Aramco and Jacobs Engineering, including construction management services, a move that is estimated to create around 3,000 jobs.

It also included a joint venture initiative with National Oilwell Varco (NOV) for the provision of onshore rigs and related equipment, in addition to specific aftermarket services. The joint venture will also create a training centre for maintenance and operation of NOV’s proposed drilling technology.

Additionally, Saudi Aramco signed two contracts with GE, one to perform feasibility studies on the country’s entire energy value chain, the other to carry out digitisation upgrades for the Saudi NOC’s operations with the goal of saving up to USD 4 billion annually.

Saudi Aramco expanded on a deal with Rowan Companies through a memorandum of understanding (MoU) to design jackup rigs that will be built in the Ral Al Khair Maritime yard on the eastern coast of Saudi Arabia. The original deal was to create a joint venture to retain and manage offshore drilling rigs. The contract was signed in November 2016 and is expected to begin operations in Q2 2017.

Another contract was signed with Nabors Industries for enhancing onshore drilling supply logistics and the deployment and transport of rigs, including removing deployment costs, dropping day rates, creating job opportunities and attracting FDI, through a previously agreed upon joint venture.

A MoU worth an estimated USD 2.8 billion was signed with EPCI company McDermott to grow its operational footprint in Saudi Arabia, part of the nation’s In-Kingdom Total Value Added initiative that was launched in 2015 to boost economic growth, diversification and job creation.

Technology producer Honeywell signed two MoUs for digitising the hydrocarbons industry and investigating engineering technology additions. Another MoU was signed by US engineering multinational Emerson for digitising Saudi Aramco’s operations.

Finally, four MoUs were signed with the oilfield services giants Schlumberger, Halliburton, Weatherford and Baker Hughes, with the country supplying funding for projects related to expanding the companies’ operations in Saudi Arabia.

In a move towards involvement in the USA’s hydrocarbons industry, Saudi Basic Industries Corporation signed a deal to perform a study of the proposed Gulf Coast Growth Ventures Project with ExxonMobil’s affiliates.

The petrochemicals complex is expected to be constructed in San Paricio County, Texas, and will involve an ethane steam cracker with a capacity of 1.8 million tpy of ethylene, a monoethylene glycol system and two polyethylene units.

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