KUALA LUMPUR: Sapura Energy Bhd has been selected to join Saudi Aramco’s long-term agreement (LTA) programme for a period of six years with an option to extend.
The LTA programme covers engineering, procurement, fabrication, transportation and installation (EPCI) contracts to support Saudi Aramco’s offshore projects.
President and group chief executive officer Tan Sri Shahril Shamsuddin said the programme would enable Sapura Energy to grow its business and deepen the company’s presence in the Middle East.
“We are honoured to be selected by Saudi Aramco for its LTA programme. This win is a major milestone for Sapura Energy in line with our strategy to grow the business and deepen our presence in the Middle East,” said Shahril, who was also the signatory for the company at the signing event held in Dammam, Saudi Arabia on Monday.
Joining the major league of international service providers as an LTA contractor, Sapura Energy will participate in bids for EPCI opportunities by Saudi Aramco.
Sapura Energy qualified as an LTA contactor after successfully undergoing an extensive assessment and meeting rigorous operational and safety requirements.
A key component of the LTA is Saudi Aramco’s In-Kingdom Total Value Add (IKTVA) programme which aims to drive local value creation with the LTA contractors.
Sapura Energy has taken proactive steps to fulfil its IKTVA commitments by partnering local businesses and developing local capabilities by leveraging on its in-house technical and project management expertise as well as its world-class fleet of offshore construction assets.
Saudi Aramco is reportedly planning to invest US$500 billion over the next 10 years as part of its strategy to become a global refiner and chemical manufacturer.
The investment plans are part of the company’s strategy to profit from segments in the oil industry with high demand and pursue the kingdom’s economic diversification programme.
Saudi Aramco’s planned acquisition of a 70 per cent interest in chemicals company Sabic from the sovereign Public Investment Fund (PIF) is reportedly valued at US$70 billion. The deal does not include the consideration for this transaction.
Meanwhile, Sapura Energy recently announced that it was selling a 50 per cent stake in its wholly-owned exploration and production subsidiary, Sapura Upstream, to OMV AG for US$890 million (RM3.7 billion) cash.
A total of US$720 million (RM3 billion) will be utilised to repay the company’s debts and US$160 million (RM667 million) will be allocated for working capital. The deal is expected to be completed in the first quarter of 2019.