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March 22, 2016
Supply Chain OpportunitiesOil & Gas
2
Saudi Aramco: Confidential
Objective
Share spend plan of $33 billion each year
Present opportunities
Drive development of local supply chains
3
Saudi Aramco: Confidential
Business EnvironmentOil & Gas Wells
718838
1,1421,233 1,242 1,299 1,338
0
500
1,000
1,500
2012 2013 2014 2015 2016 2017 2018
4
Saudi Aramco: Confidential
Opportunities
Average Spend / Year is 33 Billion USD
31%
11%42%
10%
6%
Surface Facilities
Infrastructure
Drilling
UR
Other
$334 Billion
5
Saudi Aramco: Confidential
Building on Successannual spend with US contractors
2015 - $5.58 billion
2014 - $5.7 billion
2016 - $ 4.0 billion
US contractors registered with Saudi Aramco – 6,993
Active contracts with US contractors - 552
6
Saudi Aramco: Confidential
Building on Successannual spend with US manufacturers
2015 - $1.34 billion
2014 - $1.52 billion
2016 - $ 1.37 billion
This participation can grow
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Saudi Aramco: Confidential
Local Supply Chainsa step change
Local content spend: 35%
Status quo is not good enough
A step change in our commitment
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Saudi Aramco: Confidential
Local Supply Chainscritical objectives
Double local content to 70% by 2021
Export 30% goods and services
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Saudi Aramco: Confidential
Local Supply Chainswhy change?
Current model is unsustainable
Build long-term partnerships
Invest in long-term prosperity
Create long-term employment opportunities
10
Saudi Aramco: Confidential
Local Supply Chainshow we will succeed
Formal mechanism for fair competition
In-Kingdom Total Value Add: IKTVA program
Systematic, fair, transparent
Local content at the heart of the procurement process
A requirement of doing business
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Saudi Aramco: Confidential
Local Supply Chainshow we will succeed
IKTVA will be assessed by the following metrics:
A. Procurement of localized goods and services
B. Salaries paid to Saudis
C. Costs incurred training & developing Saudis
D. Supplier development spend
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Saudi Aramco: Confidential
Local Supply Chainshow we will succeed
Supplier IKTVA Formula:
% IKTVA = 𝑨+𝑩+𝑪+𝑫
𝑬∗ 𝟏𝟎𝟎
A. Procurement of localized goods and services
B. Salaries paid to Saudis
C. Costs incurred training & developing Saudis
D. Supplier development spend
E. Revenue
13
Saudi Aramco: Confidential
Local Supply Chainshow we will succeed
Cornerstone of RFQs
Integral to Technical Proposals
A costed deliverable
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Saudi Aramco: Confidential
Local Supply Chainshow we will succeed
Designed IKTVA to attract global partners
Improving education
Ensuring regulations help business
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Saudi Aramco: Confidential
Local Supply Chainshow we will succeed
Promoting economic and industrial diversification
Widening and deepening the supply chain
Encouraging ‘clusters’
Promoting SMEs
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Saudi Aramco: Confidential
IKTVA – a true win-win proposition
Opportunity to capture the major share of Saudi Aramco spend
Local Supply Chainshow we will succeed
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Saudi Aramco: Confidential
Local Supply Chainshow we will succeed
$334 Billion Spend
Increase oil and gas reserves
Invest in maintaining MSC
Increase gas production
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Saudi Aramco: Confidential
Local Supply Chainshow we will succeed
0
5000
10000
15000
20000
25000
30000
35000
40000
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
PM PM-Civil Drilling Unconv. Gas Exploration
$334 Billion Spend
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Saudi Aramco: Confidential
Upstream
Jazan refinery & power plant
5 new bulk plants
Chemical value parks:
o SADARA
o PetroRabigh
6 Power generation plants
Local Supply Chainshow we will succeed
20
Saudi Aramco: Confidential
Saudi Arabian Company for Industrial Development
Technovia
Positive business environment
Multiple opportunities
Local Supply Chainshow we will succeed
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Saudi Aramco: Confidential
We have to change
IKTVA ensures the change
Strategic, sustainable and successful relationship
Local Supply Chainshow we will succeed