Saudi Aramco IKTVA Program - aramcooverseas.com · Saudi Aramco: Confidential “A thriving economy provides opportunity for all… we will develop our investment tools to unlock

Saudi Aramco IKTVA Program

Saudi Aramco: Confidential

“A thriving economy provides opportunity for all… we will develop our

investment tools to unlock our promising economic sectors, diversify our

economy and create job opportunities.” HRH Deputy Crown Prince Mohammed bin Salman

The Vision and Saudi Aramco’s Role

• Enable sustainable economy, supply chain and energy sector

• Double locally manufactured materials and services

• Create technical and professional jobs and careers

Saudi Jobs

70% Saudi Content

30% Exports

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Infrastructure Financial Support

Saudi Aramco Joint Ventures

iktva

Local Supply Chain

Microeconomic Fundamentals & Enablers

Ecosystem for Localization

3

Human Capital

Saudi Aramco

• Jazan Refinery

• EIC

• Maritime Yard …

Joint Ventures

• Sadara

• SATORP

• Yasref …

Anchor Projects and Engine Rooms for Growth




iktva

Local Supply Chain



4

Human Capital

Infrastructure

• Ras Al-Khair

• Modon

• RCJY …

Human Capital

• NITI

• Maharat

• ITQAN …

Financial Support

• Wa’ed

• SAIIC

• SIDF …





iktva

Local Supply Chain




5

Human Capital

Manufacturers

• Pipes

• Pumps

• Turbines …

Service Providers

• GIS

• MRO

• Laboratories …


Business Opportunities

Incentives (What’s in it for you?)

iktva – General Framework

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The In-Kingdom Total Value Add (iktva) Program

iktva is a program,

not a metric

iktva will work with

suppliers in a new

way for success

iktva is a Saudi

Aramco

Strategic

Imperative

Saudi Aramco vision is to enable a

globally competitive Saudi

Industrial Base

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Supplier IKTVA Formula

% iktva = 𝑨+𝑩+𝑪+𝑫

𝑬∗ 𝟏𝟎𝟎

DEFINITION

The IKTVA program

drives, measures and

monitors the “added-

value” brought to the

Kingdom by a supplier.

A. Localized goods and services ($)

B. Salaries paid to Saudis ($)

C. Training & Development of Saudis ($)

D. Supplier Development Spend ($)

E. In relation to revenue (spend from Saudi Aramco or the Kingdom)

Additional information:

• Number of Saudi Employees

• Investment ($)

• R&D spend ($)

• Exports ($)


Key Points about iktva

UNIFORM EVALUATION

FOR BOTH

Service Contractors

Materials Providers

SUPPLIER FOCUSED

Co-developed with

the suppliers

MUCH SIMPLER THAN

THE OTHER

INTERNATIONAL

PRACTICES

ASSESSMENT &

TRANSPARENCY

Validation by 3rd party

8


How iktva Program Works

IKTVA is imbedded from start to finish

OPERATIONS

• Facilities Operation

• Field & Well

Services

PLANNING

• Design Basis Scoping

• Drilling Schedule

Development

• Services Schedule

Development

DESIGN

• FEED

• Requirements Master

Plan

• Scope design

CONSTRUCTION

• Detail Engineering,

Procurement, and

Construction

• Contract execution

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iktva engagement framework

Suppliers 5-Year Action Plans Process

Contract IKTVA Target = ZZ%

IKTVA Target Breakdown

o Local Goods & Services

o Saudi Compensation

o Saudi Training

o Local Supplier Development

CONTRACT (2)

CONTRACT (1)

CONTRACT (3)

IKTVA Contract SpendSuppliers 5-Year Action Plans Process

Baseline IKTVA Score = XX

2021 IKTVA Target = YY%

o Goods & Services: Expanding IK

manufacturing, and Sourcing

o Increase Saudization to XX%

o Supporting established training

schools and expanding their

training

o Develop IK suppliers

Supplier B

Supplier A

IKTVA Baselines & Plans

Supplier C

Supplier D

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IKTVA Baseline1 Monitoring4IKTVA Action

Plan2

Contract

Targets3

Evaluation

Commercial

Saudi Aramco: Confidential11

iktva toolbox

Included Excluded

Category A:

Goods & Services

• IK Manufactured Goods &

Services

• IK Operating & Admin

Expenses

• OOK Goods & Services

• Materials/Services

from Agents

• Capital Expenditures

Category B:

Compensation

Saudi Compensation:

• Salary & Bonus

• Housing

• Transportation

• Education Assistance

All Expat Base Salary &

Bonuses

Category C:

Training

Costs Associated With Saudi

Training

• Internships

• Scholarships

• Travel and Accommodations

• Course Fees

Training Costs Associated

With Expats

Category D:

Supplier

Development

All Cost Including Workforce,

Materials, Travel, …





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Access to Information

Strategic Demand Forecasting (SDF)

Structured approach to collecting, analyzing, creating, and disseminating information to internal and external

stakeholders

10-Year CAPEX Expenditure

Building Blocks Breakdown

Aggregate and analyze

(G&S)

Total Labor Demand


Drilling Well Count

Average Spend / Year is $33 Billion

Capital program forecast

31%

11%42%

10%6%

Surface Facilities

Infrastructure

Drilling

UR

Other

$334 Billion

$330+ Billion of Opportunity in 10 Years

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Disclaimer:

This presentation contains forward-looking statements regarding future events based on current expectations, estimates, forecasts, and projections. The presentation is

subject to updating, revision, further verification and amendment without notice. No reliance may be placed for any purpose on the information or opinions contained in this

presentation or any other document or statement, or on the completeness, accuracy or fairness of such information or opinions therein. No representation or warranty, express

or implied, is made or given by or on behalf of Saudi Aramco or its employees, or any other person as to the accuracy or completeness or fairness of the information or opinions

contained in this presentation and no responsibility or liability is accepted by any of them for such information or opinions or for any errors, omissions, misstatements,

negligent or otherwise, or for any communication written or otherwise, contained or referred to in this presentation.

2016 2020 2026


Drilling Materials – 10 Years Forecast $57 Billion

Quantities Examples

OCTG API, 11

Million units

Trees

20,000 units

Casing heads

15,000 units

Hanger

assemblies,

24,000 units

Cement

5.8 million Tons

Mud Products

(Liquid)

298 million

gallons

Percentage of Total Material Spend

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Rigs and Well Services – 10 Years Forecast $119 Billion

Rig Drilling Ops Services = $60 BWell Services Total Spend = $59 B

136

84

4330

3

OnshoreOil

OnshoreGas

OffshoreOil

UR OffshoreGas

Average Rig Count/Year

16


Average Spend / Year is $33 Billion

Capital program forecast

31%

11%42%

10%6%

Surface Facilities

Infrastructure

Drilling

UR

Other

$334 Billion

$330+ Billion of Opportunity in 10 Years

17

Disclaimer:

This presentation contains forward-looking statements regarding future events based on current expectations, estimates, forecasts, and projections. The presentation is

subject to updating, revision, further verification and amendment without notice. No reliance may be placed for any purpose on the information or opinions contained in this

presentation or any other document or statement, or on the completeness, accuracy or fairness of such information or opinions therein. No representation or warranty, express

or implied, is made or given by or on behalf of Saudi Aramco or its employees, or any other person as to the accuracy or completeness or fairness of the information or opinions

contained in this presentation and no responsibility or liability is accepted by any of them for such information or opinions or for any errors, omissions, misstatements,

negligent or otherwise, or for any communication written or otherwise, contained or referred to in this presentation.

Surface Facilities

0.5

3

9

10

19

24

29

39

Renewables

Power

Pipelines

Oil Facilities

Other

Gas Facilities

Refining & Petrochem

Maintain Potential


Examples of Surface Facilities Materials 10 Years Forecast

0 1 2 3 4 5 6 7 8 9 10

CABLE, Low V, 56,420 KM

PUMPS CS, 3,789 Units

BOILER PLANT EQUIP, 185 Units

STORAGE TANKS, 1177 Tanks

AIR COOOLERS, 554 Units

STAINLESS STEEL PIPING (SS314/316), 135,348 Tons

CONCRETE, 20205 Cubic Meters

COMPRESSORS, 514 Units

OTHER EQUIPMENT, 2000 Items

PROCESS VESSELS SS, 800 Units

CONTROL VALVES, 86000 Units

STRUCTURAL STEEL, 734000 Tons

FIELD INSTR, ANALYZERS, GAGES - 66000 Units

CARBON STEEL FITTINGS & VALVES - 15.8 Million Units

STAINLESS STEEL FITTINGS & VALVES - 5.7 Million Units

HEAT EXCHANGERS - 4300 Units

CARBON STEEL PIPING - 3.1 Million Tons

PROCESS VESSELS CS - 6000 Units

Surface Facilities Materials

$56 Billion

Surface Facilities

Construction

$75 Billion

Thousands

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Manpower 10 Year Forecast

* This demand is for industrial projects only. It does not include

Commercial, Residential, or Infrastructure Projects.** Inclusive of all disciplines

DRILLING AVERAGE MANPOWER/YEAR*

SKILL LEVEL EXAMPLES

PROCESS FACILITIES AVERAGE MANPOWER/YEAR*

SKILL LEVEL EXAMPLES


National Specialized Training Centres

Operating Facilities (11 Centers)

• Eleven active training centers to support jobs creation and training with total capacity of 10,800 trainees

• Today a total of 6,304 trainees are sponsored in training centers

• New companies started to join new training centers as founding stakeholders such as: drilling companies,

power companies and construction companies

• Will continue to add more specialized training centers reaching 25 centers with total capacity of 42,000

trainees by 2030


More Opportunities – Metal Conversion Ecosystem

Conversion Industries Castings

Forgings

Heat Treatment

Precision Machining :

o Tooling Engineers

o Design Engineers

o QC/QA

o Machinists

o Industrial Engineers

o Maintenance/Ops

Coating

Testing

Cascading Support

Industries CAD/CAM

Cutting Tools/Fluids

Training Academy

MRO

Tool & Jig Repair

Regrind Operation

Critical Support Facilities Laboratories

Recycle and Reclamation

Facilities

Product Certifications

Hydrostatic Testing

Destructive & ND Testing

In Kingdom Total Value Add Implemented Natural Resource

Raw Materials

Iron ores

hematite (Fe2O3)

or magnetite

(Fe3O4).

About 98% of world

iron ore production

is used to make

iron in the form of

steel.

Nickel

Copper

Steel Making

The process for

producing steel from

iron ore and scrap.

Steel Products

Coils -----SSAW, ERW

Pipes

Plates ----LSAW Pipes

Billets ----Seamless Pipe

Ingots ----Casting

Carbon, Stainless & Alloy

Steel Types

Resource Education, Training and Development

(OEM) Finished goods

Downhole / Rig

equipment

Static Equipment :

Pressure vessels

Heat Exchangers

Pipe

Pipe Fittings

Rotating Equipment :

Pumps

Turbines

Compressors





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Incentives – What’s in it for You?

• Saudi Aramco incentives:

– Significant potential - Saudi Aramco continues to build capacity

– Long-term corporate purchase agreements

– Premium allowance for local manufacturers

– Exclusivity to local manufacturers in certain sectors

– IKTVA based market share and business allocation

• Saudi Arabia additional incentives:

– Favorable foreign investment laws

– Young educated population

– Low cost energy & industrial land

– Industrial loans on favorable terms (SIDF)

– Financial support from Human Resources Development Fund (HRDF)

– Saudi Arabian General Investment Authority (SAGIA)


www.iktva.sa

Comprehensive information on iktva program


3rd Party Certifiers

Centralized iktva submission gateway

FAQ

24

iktva Website

http://www.iktva.sa/


Takeaway Messages

WIN – WIN PROPOSITION

SIGNIFICANT OPPORTUNITIES LIE AHEAD

EXCELLENT SUPPORT FROM KEY STAKEHOLDERS

IS A MUST HAVE PROGRAM FOR DOING BUSINESS WITH SAUDI ARAMCO


Thank You

Documents

Saudi Aramco IKTVA Program - aramcooverseas.com · Saudi Aramco: Confidential “A thriving economy provides opportunity for all… we will develop our investment tools to unlock