Aramco inks $6bn supply chain deal, boosts Jafurah field gas reserves

Image courtesy: FAYEZ NURELDINE/ Getty Images

Saudi Aramco, the world’s biggest oil producer, has signed 40 corporate procurement agreements worth $6bn with local suppliers, as the state-owned energy giant seeks to develop the country’s energy services sector while boosting its localisation programme.

The agreements cover the supply of a range of products comprising strategic commodities, such as instrumentation, and electrical and drilling equipment, the energy firm said in a statement.

The deal seeks to strengthen the company’s domestic supply chain ecosystem and contribute to its resilience and ability to meet the evolving needs of its customers.

“The 40 new agreements signed today are expected to contribute to the domestic value chain, and further enhance the ecosystem that Aramco is helping to build. These agreements move us towards a more prosperous, diverse and resilient supply chain, which will help ensure business continuity,” Wail Al Jaafari, Aramco executive vice president of Technical Services said in the statement.

The supply chain agreements are also expected to contribute to the oil major’s iktva programme, an initiative that aims to drive economic growth and create new opportunities for Saudi nationals.

Aramco gas discovery

Meanwhile, an additional 15 trillion standard cubic feet of gas (scfd) have been proven at Aramco’s Jafurah field, adding significant volumes to the kingdom’s proven gas and condensate reserves.

The company estimates that reserves at Jafurah have reached 229 trillion cubic feet of gas and 75 billion barrels of condensates. Jafurah is the country’s largest unconventional non-oil associated gas field and it is reportedly the biggest shale gas development outside of the US.

“This achievement enhances the kingdom’s hydrocarbon wealth through proven reserves of gas, which is a vital resource for the energy and chemicals industries,” said Amin H. Nasser, Aramco president & CEO.

Last November, Aramco produced the first unconventional tight gas from its South Ghawar operational area. Commissioned facilities at South Ghawar can process 300 million scfd of raw gas and 38,000 barrels per day of condensate.

With a market capitalisation of $2.1tn (SAR7.7tn) as of February 28, 2024, Aramco’s third-quarter net profit plunged by 23 per cent, marginally beating analyst estimates, on lower crude oil prices and volumes sold.

The company is set to announce its 2023 full-year results in March.

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