Almost $400bn to be spent on Saudi IKTVA program in the next 10 years
360,000 trainees are expected to be prepared for labor market by 2030
The In Kingdom Total Value Add (IKTVA) program, which is one of Saudi Aramco’s strategies to advance the development of the energy services sector in the Kingdom and to lay down the foundation of an economic ecosystem that helps attract and encourage local industries related to the energy sector and capable of competing on the world level.
IKTVA was designed and launched in December 2015 with the aim of leveraging the relationship between Saudi Aramco and its suppliers to support the Company’s goals to increase local content to 70% by the end of 2021. IKTVA also seeks to develop a diversified and sustainable ecosystem that is capable of competing in the energy sector in the Kingdom, which will provide the labor market with 360,000 graduates from 30 Saudi Aramco training centers and institutes by 2030.
IKTVA program aligns with Saudi Aramco’s strategy to support and enhance local content programs. It is a main procurement program carried out by the company that contributes to accelerating localization and expanding investment opportunities for small and medium enterprises, which will make them more capable of growing and effectively contributing to economic growth.
IKTVA also aims to develop and diversify economic resources and attract investment by increasing the percentage of local content in the oil and gas sector. In order to achieve tangible and practical results, the company continues to hold the IKTVA Forum, which is an annual platform for meeting with manufacturers and energy-related service providers to enhance total added value in alignment with Vision 2030 and the 2020 National Transformation Program.
Saudi Aramco is keen on supporting the growth and development of local companies that manufacture materials needed for the power generation sector, provide engineering and oil field services, in addition to building specialized industrial cities in energy and manufacturing to boost the Kingdom’s status as a major investment center in the energy services sector locally and internationally.
Enhancing local content is one of Saudi Aramco’s main objectives. To this end, value should be created in every aspect of its operations, which will reflect positively on its efforts to diversify the economy, boost long-term economic growth, create more good jobs for Saudis, promote innovation and increase competitiveness.
On top of Saudi Aramco’s priorities is the creation of a world-class competitive local supply chain that adds value to the Kingdom. In the past three years since IKTVA was launched, the Company made significant progress in implementing IKTVA program by focusing on the development of a reliable local supply chain and the creation of job opportunities. The program seeks to develop the energy services sector and increase the volume of goods and services locally available, thereby contributing to greater efficiency while enhancing and diversifying the local economy.
Since the IKTVA program launch, 98 local businesses have registered to do business with Saudi Aramco. At the same time, 90 local businesses have expanded their operations and were approved for new production lines.
Saudi Aramco seeks to further develop IKTVA’s capabilities in order to reach its goal of serving the national economy. Therefore, IKTVA has become a roadmap leading efforts to develop the supply of goods and services and help establish a national energy sector capable of competing on the world level and capable of exporting 30% of its production to global markets.
IKTVA offers a level-playing field of opportunities for local and global suppliers who meet the conditions for obtaining Saudi Aramco contracts. In addition, it is a strong boost for localizing jobs and industry.
IKTVA was launched in 2015 with a projected spending of more than 1.5 trillion Saudi Riyals in the next 10 years. In the first phase of the program, the Company sought to achieve continuous growth in the local content of goods and services.
Saudi Aramco seeks through the program to boost the means and efforts to ensure the continuation of building a diverse, effective and highly-efficient supply chain that can meet its business objectives and drive economic growth across the Kingdom on a sustainable basis. IKTVA also contributes to building a solid base of alliances among specialized national investment entities and world entities with long experience in this regard.
- Increasing local content to 70% by 2021.
- Increasing the volume of goods and services provided from inside the Kingdom.
- Localizing industries and services related to the energy sector.
- Enabling the company to carry out its work more effectively.
- Boosting and diversifying the Saudi economy and supporting the local supply base.
- Helping establish a Saudi energy sector capable of exporting 30% of its production annually.
- Building a diverse, effective and highly efficient supply chain.
- Advancing economic growth in the Kingdom on a sustainable basis.
- Building a solid base of alliances between specialized national investment entities and their international counterparts.
- Participating in the creation of 30 training centers and institutes in cooperation with erlevant stakeholders.
- Qualifying 360,000 trainees to join the labor market by 2030