Saudi Aramco plans to raise its spending to $414 billion over the next 10 years, including on infrastructure and drilling, as the state oil giant moves into new businesses, Chief Executive Amin Nasser said on Tuesday.
The spending plan is higher than Aramco’s projection last year of around $334 billion by 2025 as the oil producer has been expanding its businesses, Nasser said.
“We are into so many sectors now,” Nasser told reporters on the sidelines of iktva SMEs Forum and Exhibition 2017, which is aimed at promoting the Kingdom’s industrial base and the manufacture of a bigger share of products domestically.
In welcome remarks before an audience of over 2,300 delegates from 30 countries, Nasser highlighted the iktva program and the opportunities it offers for a localized supply chain.
Nasser said that iktva aims to deliver a world-class, locally sourced supply chain in the Kingdom with an overarching objective of achieving 70 percent of locally supplied content by 2021.
Iktiva Forum and Exhibition was launched with an agenda designed to raise the bar with a set of over 140 investment opportunities in localization valued at over $16 billion in several industrial and business sectors across the Saudi Arabian energy sector.
Nasser said the two-day forum provides a platform for companies interested in establishing operations in Saudi Arabia to engage with the Kingdom’s energy sector stakeholders and their key suppliers.
He highlighted the important role of small and medium-sized enterprises (SMEs) in driving value creation and innovation in the localization process.
He said: “SMEs are the engine of innovation for economic growth and development. They have the agility, the know-how, the market expertise, and the products the oil and gas industry requires. Yet, SMEs currently contribute just 20 percent to our GDP, which is less than half of industrialized economies. That is why Saudi Vision 2030 recognizes the huge potential of SMEs, and has set an initial target of moving their contribution from 20 percent to 35 percent.”
For his part, General Manager for procurement Nassir Al Yami said that Saudi Aramco’s plan includes $134 billion to spend on drilling and well services and $78 billion to maintain oil output potential.
Aramco has already created a department for renewables to develop wind and solar projects and last month it signed a preliminary deal with petrochemical producer Saudi Basic Industries Corp (SABIC) to build a $20 billion complex to convert crude oil to chemicals.