The Energy Localization Forum, held in Riyadh from October 23 to 24, marked a significant milestone for Saudi Arabia’s energy sector, with the signing of 124 agreements totaling over $27.7 billion. These agreements involve 118 companies and represent a crucial step in the Kingdom’s strategy to localize its energy industry, spanning various sectors including oil, gas, renewable energy, and petrochemicals. The overarching goal is to achieve 75 percent localization by 2030, which aims to stimulate long-term economic growth, decrease import reliance, and enhance the country’s position as a global energy leader.
Launch of the “Nuwatin” Initiative
During the forum, the Kingdom unveiled the “Nuwatin” initiative, designed to facilitate partnerships among suppliers, investors, and stakeholders within the energy sector. This localization enablement program has already engaged 63 suppliers and encompasses 59 energy components, with expectations to boost localization efforts by as much as 20 percent in select areas. By serving as a collaborative platform for both public and private entities, the initiative aims to address challenges associated with project development and supports broader localization efforts across critical energy supply chains.
Saudi Aramco’s Strategic Agreements
Saudi Aramco played a pivotal role in the forum, securing 10 agreements focused on the “Drilling Equipment and Chemicals” initiative. Collaborations with global industry leaders such as Baker Hughes, Schlumberger, and Weatherford International will enhance the localization of essential equipment and services within the oil and gas sector. Additionally, Aramco signed five agreements related to gas monitoring and control systems with notable companies like Honeywell and Emerson, reinforcing the Kingdom’s commitment to strengthening its domestic energy infrastructure.
Saudi Arabia Electricity Company Initiatives
The Saudi Arabia Electricity Company (SEC) also made significant advancements, signing two major contracts with Siemens Energy and Hitachi Energy to localize high-voltage gas-insulated switchgears, vital for the power grid. Furthermore, SEC entered into seven agreements aimed at boosting the production of electrical components, partnering with firms such as Arabian Transformers Co. and Power Transmission & Telecommunication.
Commitment to a Fully Localized Supply Chain
In his keynote address, the Minister of Energy underscored the importance of creating a fully localized energy supply chain. He emphasized that the focus should extend beyond just local content to encompass materials, components, and minerals, advocating for a comprehensive approach that integrates all aspects of the supply chain, from raw materials to finished products. The minister reiterated the necessity of collaborative efforts across various sectors, rejecting the idea of isolated strategies.
This initiative positions Saudi Arabia’s energy sector within a broader ecosystem, empowering key players like Aramco, SABIC, and SEC to meet ambitious localization targets, ultimately fostering a sustainable and resilient energy landscape.
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