Turkish companies set for closer cooperation with Aramco
Saudi Aramco chief says diversification drive offers opportunities
The Saudi oil company extended its relationship with Turkish industry with the signing of a memorandum of understanding (MoU) with 18 companies in Istanbul on Tuesday. The agreements forge closer ties between the two countries, as Saudi Arabia seeks to bring foreign expertise into its drive to diversify its economy.
The signing ceremony was attended by Saudi Aramco president Amin Nasser, and Turkey's energy minister Berat Albayrak, along with other leaders.
The MoU is intended to build on Saudi-Turkish cooperation, which has been growing over recent years, as demonstrated by increased bilateral trade and investment between the two economies.
Aramco said the agreements had the potential to expand commercial partnerships between the two countries. "We are already looking at some downstream options that can help meet your needs here too, "Nasser said at the signing ceremony, adding that distribution and refining would be among the sectors being discussed in bilateral talks this week. He said the kingdom was looking to expand its refining investment both at home and globally.
The agreement lines up new partners that the Saudi energy firm could work with on future capital projects, which would help promote diversification and infrastructure development in support of the Saudi Vision 2030 strategy.
"This is a great opportunity for Turkish companies, particularly to bring their expertise and invest in the kingdom's future," Nasser said. "Their technical ability and quality of work has been very high."
The Turkish companies involved are leaders in a wide range of business activities, encompassing airport construction and management, power generation, the oil sector and road construction. Several have already worked on Saudi projects, including the Manifa Field development, the Jeddah Storm Water projects, Medina airport, the Riyadh water transmission system, the Jubail railway network and Yanbu Industrial City's residential facilities.
Aramco wants to place more emphasis on the localisation of products and content, boosting opportunities for foreign manufacturers seeking to operate in the kingdom. "We will double the percentage of locally produced energy-related goods and services to 70% by 2021," he said.
Saudi Arabia plans to spend more than $300bn on oil, gas and other projects in the coming years, of which around $12bn has been earmarked for infrastructure such as pipelines, oil rigs and residential facilities. Nasser was keen to stress that Aramco's future model would not be "business as usual" and that diversification of its activities would be part of its future strategy.
"There is plenty of business available in Saudi Arabia, not just in Saudi Aramco but in the kingdom more broadly," he said.
He stressed that tenders in Saudi Arabia were highly competitive, but that if Turkish firms bid competitively, he was confident they would win more work.
Aramco has been forging partnerships with a number of firms over recent times, as the energy giant seeks to support efforts to broaden the kingdom's industrial base and diversify the economy. Recent agreements include an MoU with GE and Italy's Cividale to build a $400m high-end forging and casting facility in Saudi Arabia.
The company is planning a partial privatisation, with a listing planned for 2018. Nasser said Aramco was weighing up which major markets it would list itself, in addition to Saudi Arabia itself.