Saudi Aramco, the world's largest oil producer, has taken a significant step towards strengthening its domestic supply chain by signing 40 corporate procurement agreements worth a total of $6 billion with local suppliers. This move aligns with the company's strategic localization program, aiming to not only diversify its supplier base but also contribute to the economic development of the Kingdom.
The agreements encompass a broad range of products, including essential commodities like instrumentation, electrical equipment, and drilling machinery. This collaboration is expected to enhance Aramco's operational resilience and agility in meeting its evolving needs while fostering the growth of the domestic energy services sector.
"These new agreements represent a major step forward in our commitment to building a robust and sustainable domestic supply chain ecosystem," stated Wail Al Jaafari, Executive Vice President of Technical Services at Aramco. "By partnering with local companies, we are not only securing reliable and cost-effective solutions for our operations, but also contributing to the creation of jobs and economic opportunities within the Kingdom."
The agreements are expected to provide long-term demand visibility for the participating suppliers, allowing them to plan for future growth and further invest in localization efforts. This aligns with Saudi Arabia's Vision 2030, a national transformation plan that emphasizes economic diversification and job creation beyond the oil and gas sector.
Furthermore, these partnerships are anticipated to contribute to the success of Aramco's iktva program, an initiative focused on maximizing in-Kingdom value creation. The program incentivizes companies operating in the oil and gas sector to source goods and services locally, fostering the development of a domestic industrial base and skilled workforce.
By strengthening its domestic supply chain, Aramco aims to achieve greater operational efficiency and resilience, while simultaneously contributing to the economic diversification and growth of Saudi Arabia. This strategic move positions the company to navigate the evolving energy landscape while supporting the Kingdom's long-term development goals.