Building a globally competitive energy sector
IKTVA is our roadmap for advancing the way we procure goods and services. The program strives to localize 70% of expenditures for goods and services by 2021, supporting an internationally competitive energy sector capable of exporting 25% to 30% of its output per year.
In 2016 we increased the value of our material procurement spending awarded to local manufacturers to reach $2.9 billion — an increase of $800 million over 2015 and the highest level of local content in our history. We also completed the third-party IKTVA certification of our 100 top service providers, representing 80% of our procurement.
A significant landmark of the commitment to our IKTVA program by leading international businesses was the expansion of the General Electric (GE) GEMTEC gas turbine manufacturing facility. At the facility, in support of our Master Gas System Expansion Project, four high-efficiency gas compression trains were assembled locally for the first time. As part of the program, GE Oil and Gas qualified a network of Saudi-based suppliers for local and international GE markets — boosting the profile of in-Kingdom manufacturers and helping to catalyze further growth.
In another prominent example of how IKTVA is enabling new opportunities that also strengthen our network of service suppliers, we assisted the opening of Schlumberger’s Middle East Center for Reliability and Efficiency at Dammam Second Industrial City. Dedicated to advance maintenance and servicing of oil and gas technologies, the new cutting-edge facility is the largest of its kind in the world.
We also signed two joint venture agreements designed to help spur the localization of the energy value chain and enhance in-Kingdom technical capabilities:
- With Nabors Industries Ltd., a global leader in drilling rigs, to manage and operate onshore drilling rigs along with capital commitments toward future rigs manufactured in Saudi Arabia.
- With Rowan Companies plc, a global offshore contract driller, to own, operate, and manage offshore drilling rigs. The agreement also committed the new company to purchase future newly built rigs constructed in Saudi Arabia.
These two joint ventures, which are expected to create 5,000 jobs, illustrate our strategy to connect energy, people, and ideas to create new opportunities and additional value for our company and for Saudi Arabia.