Aramco inked 59 corporate procurement agreements (CPAs) with 51 domestic and international firms, potentially resulting in the creation of 5,000 new employment in the Kingdom of Saudi Arabia over the following ten years. The $11 billion deals are anticipated to strengthen Aramco’s reliable supply chain and lead to the establishment of facilities for the production of materials in the Kingdom.
The 59 CPAs cover a variety of strategic commodities, including air-cooled heat exchangers, wellheads, switchgear, pipes, compressors, structure steel, vibration monitoring systems, and drilling chemicals. The agreements were signed by a number of businesses, including Baker Hughes, Cameron Al Rushaid, Halliburton, SLB, and TechnipFMC. The CPAs are used to create long-term commitments and agreements with supplier partners as part of the Aramco in-Kingdom Total Value Add initiative (iktva), which falls under one of its strategic pillars.
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.”
Mohammad A. Al-Shammary, Aramco Vice President of Procurement and Supply Chain Management, said: “The CPA holders will be our future strategic manufacturing partners for these commodities, and the agreements further broaden our localization infrastructure across the Aramco network.”
The CPAs want to provide a foundation for cooperation and success among all parties. CPA holders concur with Aramco’s goal of creating a top-notch supply chain in Saudi Arabia. In exchange for preferred status with Aramco, Aramco joint ventures, and Aramco affiliates, supplier partners are required by their CPA agreements to create local facilities, transfer technology, conduct local research and development, and expand the local labor and supply chain.
Since the launch of the CPA pillar, Aramco has entered into over 100 CPAs. These strategic agreements have driven localization in critical commodities such as drill bits, downhole, valves, pressure vessels, and process automation systems.
Iktva was launched by Aramco in 2015 with the intention of building a top-tier supply chain in Saudi Arabia. Iktva has produced results in major focal areas since its creation, including Saudi workforce development, research and development, supplier development, and exports.