Saudi Minister of Energy Prince Abdulaziz bin Salman revealed the imminent formation of a committee to localize the energy sector in the country under the umbrella of the Supreme Committee for Energy Mix Affairs for Electricity Production and Enabling Renewable Energy Sector, with the aim to achieve greater cohesion and enhance cooperation between the various stakeholders.
The minister stressed that the comprehensive and joint approach has made it possible to overcome the challenges facing large national projects, such as the Energy Efficiency Program, the Electricity Sector Integration, and the Circular Carbon Economy Initiative.
He was speaking during the inauguration of the sixth edition of the “In Kingdom Total Value Add” (IKTVA), which is organized by Saudi Aramco, in the presence of Prince Ahmed bin Fahd bin Salman bin Abdulaziz, deputy governor of the Eastern Province, Bandar Alkhorayef, Minister of Industry and Mineral Resources, and Yasir Al-Rumayyan, Chairman of the Board of Directors of Aramco.
According to information released on Monday, Saudi Aramco, through the IKTVA program, was able to achieve a major shift in increasing local content, by directing 59 percent of its spending during 2021 to local suppliers, compared to 35 percent when the first version of the program was launched in 2015.
Supply chains key to industry success
Prince Saud bin Nayef, governor of the Eastern Province, underlined the importance of the forum in promoting local content and localizing technology and industry.
“The world today is witnessing successive events and developments, which call for building a reliable and effective system for the local supply chain,” he stated, adding: “With the accelerating impact of globalization and the inevitable integration between local, regional and global supply chains, strengthening this system and its infrastructure has become an important pillar of the industry’s success…”
Attracting $7 billion
Yasir Al-Rumayyan, for his part, said that IKTVA’s investments have attracted capital expenditures estimated at $7 billion, which in turn helps establish a competitive industrial base in Saudi Arabia.
He indicated that IKTVA has contributed about $100 billion since its inception. He explained that the program provided an incentive for innovation inside the country, as the company’s suppliers have increased their spending on research and development from $21 million to $91 million.
Since the launch of the program, local content in the company’s supply chain has increased from 35 percent to nearly 60 percent, he emphasized, adding that Saudi employees now account for one in four people working in Aramco’s supply chain.
Fertile land for investment
Eng. Amin Al-Nasser, President and Chief Executive Officer of Saudi Aramco, noted that the sixth edition of IKTVA saw an increased volume of investment opportunities compared to the previous years, at a time when the world is witnessing continuous challenges in global supply chains due to the Covid-19 pandemic.
Saudi Aramco achieved greater reliability through the IKTVA program, which allowed it to respond swiftly to the market needs during the difficult times, he underlined.
“Saudi Arabia is witnessing major transformations and is a fertile land for investment opportunities. Saudi Aramco is proud to have a major role in enabling transformations and providing opportunities through the IKTVA program and the associated major local content projects, such as the King Salman Energy City, the King Salman International Complex for Maritime Industries and Services, and the Aramco Namaat Program,” Al-Nasser said.
The sixth edition of the IKTVA program will witness the signing of 50 new memoranda of understanding. The program aims to stimulate local value building, maximize long-term economic growth, and build a world-class supply chain that facilitates the development of a diversified, sustainable and competitive energy sector at the local and global levels.
