IMPLEMENTATION LEVEL

NFI

AFFECTED FLOW

Inflow

ANNOUNCED AS TEMPORARY

No

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

firm-specific

JUMBO

No

TARIFF PEAK

No
← back to the state act
Inception date: 14 Dec 2016 | Removal date: open ended
Still in force

Localisation incentive

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. 

 

 

 

 

AFFECTED COUNTRIES

MAP
TABLE
EXPORT

AFFECTED SECTORS AND PRODUCTS

435 Lifting & handling equipment & parts
8425 Pulley tackle and hoists other than skip hoists; winches and capstans; jacks.
842549 Other
8426 Ships' derricks; cranes, including cable cranes; mobile lifting frames, straddle carriers and works trucks fitted with a crane.
842620 Tower cranes
442 Machine-tools & parts
8459 Machinetools (including waytype unit head machines) for drilling, boring, milling, threading or tapping by removing metal, other than lathes (including turning centres) of heading 84.58.
845921 Numerically controlled
444 Machinery for mining, quarrying & construction; parts
8430 Other moving, grading, levelling, scraping, excavating, tamping, compacting, extracting or boring machinery, for earth, minerals or ores; piledrivers and pileextractors; snowploughs and snow blowers.
843041 Selfpropelled
843049 Other

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