DHAHRAN — Aramco on Wednesday announced a new contracting strategy for the company’s oil and gas brownfield and plant upgrade projects.

The strategy focuses on establishing new businesses and developing partnerships based on sustainability and new technologies via Aramco's giant projects by awarding long-term contracts to reputable and experienced contractors to improve cost efficiency and the quality and safety of the projects.

Ahmad Al Sa'adi, Aramco’s technical services senior vice president, said, “We are delighted to have concluded these LTAs as part of our new strategy, which offers a number of benefits to Aramco and our partners, and it will have a positive impact on the business environment and economic activities in the Kingdom.

“These LTAs which are associated with huge business which allow us to boost the performance of our brownfield and upgrade projects through new technologies and pioneering environmental sustainability fundamentals, while improving contract procurement and construction phases.

“In addition, it will enable us to continue developing homegrown talent in Saudi Arabia through achievable employment targets. This is very important to us, as well as contribute to our IKTVA target to increase local content.”

Following Aramco’s approval of the new contracting strategy, contractors’ companies were invited to submit their proposals, and after a thorough evaluation process, eight companies have been selected to carry out the work.

The scope of the LTAs includes engineering, procurement, construction, start-up and pre-commissioning of each project, as well as the installation of the upgraded facilities in the designated operating areas. The contracts are established for a period of six years with an option to exercise another six years extension.

In addition, the contracts are developed with a special emphasis on improving Saudization, local content and supply chains through Aramco’s In-Kingdom Total Value Add (IKTVA) program, helping Aramco to meet its IKTVA targets.

The contracts mandate a minimum commitment to use 39% local content and supply chains initially, increasing to a 60% commitment within six years. — SPA