ANNOUNCED AS TEMPORARYNo
On 14 December 2016, Saudi Aramco as part of its In Kingdom Total Value Add (IKTVA) program signed a Memorandum of Understanding with the American companies Rowan and Nabor.
IKTVA is a program established in 2015 and its primary scope is to achieve 70% localisation of Saudi Aramco's supply chain by 2021 (see related measure).
Consequently, indicating that the primary scope of these MoU agreements is to boost Saudi Aramco´s ability to procure most of its services, and goods locally.
Specifically, according to official sources, the core scope of these MoU agreements is for Saudi Aramco in partnership with Nabor and Rowar, establish two new joint ventures for onshore and offshore drilling.
Therefore, enabling Saudi Aramco further contribute towards boosting the development of the Saudi energy sector (in line with Saudi Vision 2030 and IKTVA program) -- as well as further localizing the drilling industry and enhancing in-Kingdom capabilities.
In addition, according to official sources, the development of these joint ventures are aimed at creating 5000 additional jobs as well as achieving 80% Saudization levels in terms of Saudi Aramco´s onshore and offshore drilling-related supply chain.
Lastly, according to official sources, the highlighted onshore and offshore drilling ventures are expected to in a 10 year period invest in total USD 6 - 7 billion in order to purchase onshore rigs and offshore jackups, manufactured in Saudi Arabia by Saudi Aramco manufacturing joint ventures (which are in the process of being set up). Nevertheless, the expected initial investment (i.e. in the first year of operations) is USD 1.2 billion for the joint venture with Rowan and USD 1 billion for the joint venture with Nabors.
Saudi Aramco -- Saudi Aramco is the largest state-owned oil company of Saudi Arabia.
Rowan -- Rowan is a US offshore drilling contractor.
Nabor -- Nabor is a US-based entity providing products and services related to drilling of oil and gas primarily.
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