iktva Program Framework & Business Opportunities Aramco: Public Agenda 1 iktva Baseline 2 5 Year...

Saudi Aramco: Public

iktva Program Framework & Business Opportunities


Agenda

iktva Baseline1

5 Year iktva Action Plan2

iktva integration in Procurement3

Historical and Future Spend1

Winning More Business2

iktva Program Framework

Business Opportunities


Agenda

iktva Baseline1







Supplier Training and Support for iktva Baselines

www.iktva.sa1

iktva summary presentation2

iktva survey template3

Detailed guidelines for iktva survey

4


iktva Survey Guidelines - Highlights

Included Excluded

Goods & Services • IK Manufactured Goods &

Services

• IK Operating & Admin

Expenses

• OOK Goods & Services

• Materials/Services from

Agents

• Capital Expenditures

Compensation Saudi Compensation:

• Salary & Bonus

• Housing

• Transportation

• Education Assistance

All Expat Base Salary &

Bonuses.

Training All Costs Associated With Saudi

Training

• Internships

• Scholarships

• Travel and Accommodations

• Course Fees

Training Costs Associated

With Expats

Supplier

Development

All Cost Including Workforce,

Materials, Travel,….


Supplier Survey Preparation and Submission

Sup

plie

rs3

rdP

arty

Ce

rtif

ier

Prepare Survey and Select Certification

Firm

Submit Survey to Saudi Aramco

Prepare Certification Report

Review Online Tools and Download

Templates

Review and Certify Survey

Provide Management Representation

Letter

http://www.google.com.sa/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwj3-trPmsTKAhWFWxoKHaJqDzAQjRwIBw&url=http://www.downtowninbusiness.com/baker-tilly-becomes-rsm-as-new-global-brand-rolls-out-in-110-countries/&psig=AFQjCNHCbPlfNoCh9cJ0CpE5_MxCvvNW8Q&ust=1453785348556972

http://www.google.com.sa/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwj3-trPmsTKAhWFWxoKHaJqDzAQjRwIBw&url=http://www.downtowninbusiness.com/baker-tilly-becomes-rsm-as-new-global-brand-rolls-out-in-110-countries/&psig=AFQjCNHCbPlfNoCh9cJ0CpE5_MxCvvNW8Q&ust=1453785348556972

http://www.google.com.sa/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwjavJLVmcTKAhVLvRoKHaL2DboQjRwIAw&url=http://seeklogo.com/tag.html?q%3DBDO&psig=AFQjCNEg13HRs_CMEw59LwJZW_MA1V2Htg&ust=1453785100359769

http://www.google.com.sa/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwjavJLVmcTKAhVLvRoKHaL2DboQjRwIAw&url=http://seeklogo.com/tag.html?q%3DBDO&psig=AFQjCNEg13HRs_CMEw59LwJZW_MA1V2Htg&ust=1453785100359769


Agenda

iktva Baseline1







iktva Action Plan Components

1. Company Background:• Executive summary

• Corporate structure

2. Goods and Services:• Company supply chain overview

• Plan to increase procurement in-kingdom

3. Human Resources:• Current and planned number of Saudis employed

• Training plans

4. Suppliers Development:• Development plans for in-kingdom suppliers


iktva Action Plan Components cont.

5. Research and Development Initiatives:• In-kingdom technology roadmap

• Technology acquisition plans

6. Exports: • Current and planned exports volume

7. Business and Market Challenges: • Major challenges with increasing iktva

• Global competitive challenge

8. 5 Year Forecasted iktva

2017 2018 2019 2020 2021

Company iktva


Agenda

iktva Baseline1







iktva in Procurement Process

3. No change in commercial evaluation process

1. No Change in technical evaluation process

2. An iktva evaluation step has been established


iktva Target Setting Process

Generate Breakdown of

materials, services & labor required

• Create material lists, services & labor requirements using scope of work and modeling/forecasting software

Determine what can be sourced locally

• Determine what can be procured locally (capacity & capability) and if there are limitations

Calculate Percentages for categories A-R

• Use material and labor cost to develop iktva percentages for IK materials, services, and labor

Set iktva target

• Using Aramco & industry information, set iktva targets


Agenda

iktva Baseline1







Historical Material Spend 10 Year Demand Forecast (Materials & Services)

$6.7 Billion Annually




Historical Material Spend




$6.7 Billion Historical Annual Material Spend

*Sample of historical spend: Average of 6 years

55% of spend represents areas of

Immediate Opportunities:

Materials sourced OOK only

Materials with 1-2 IK MFRs

45% of spend represents areas for

further development:

Materials with 3+ IK MFRs but

limited in capacity and capability

OOK Spend (Zero

IK MFRs)

23%

OOK & IK Spend

(1-2 IK MFRs)

32%

OOK & IK Spend

(3+ IK MFRs)

45%

Average Annual

Spend

$6.7 Billion*


Materials Currently Sourced OOK Only






OOK Spend (Zero

IK MFRs)

23%

OOK & IK Spend

(1-2 IK MFRs)

32%

OOK & IK Spend

(3+ IK MFRs)

45%

Average Annual

Spend

$6.7 Billion*


$13

$14

$22

$27

$45

$49

$71

$72

$84

$97

$469

$620 MM

Vessels

Pumps

Turbines

Pipe Fittings

Instrumentation

Heat Transfer Equip

Electrical

Pipe

Compressors

Valves

Chemicals

Drilling


Average Annual

Spend

$620 Million

Downhole Equipment

HANGER: LINER; FOR GAS WELLS $ 125 MM

PACKER, MECHANICAL, SWELLABLE, ISOLATION

$ 83 MM

PACKER: PRODUCTION; NON-KHF $ 38 MM

HANGER; LINER; FOR OIL WELLS $ 32 MM

VALVE: SUB-SURFACE SAFETY $ 21 MM

Adv Well Comp Eqpt

EQUALIZER/ SCREENS ACCESS $ 117 MM

GAUGES $ 27 MM

EXPANDABLE, CASING & ACCESSORIES

$ 11 MM

PDHMS, ACCESSORIES $ 7 MM

Downhole Equipment

54%

Csg Acc & Cement Eqpt

16

Adv Well Comp Eqpt27%


$13

$14

$22

$27

$45

$49

$71

$72

$84

$97

$469 MM

$620

Vessels

Pumps

Turbines

Pipe Fittings

Instrumentation

Heat Transfer Equip

Electrical

Pipe

Compressors

Valves

Chemicals

Drilling


Well StiumlnAgents

9%

Average Annual

Spend

$469 Million

Drllg Chem – General69%

Drllg Fluids – MUD20%

General Drilling Chemicals

Salts $ 228 MM

Lubricants $ 60 MM

Shale/borehole stabilizer $ 27 MM

Thinner $ 4 MM

Defoamer $ 3 MM

Detergents, emulsifiers & surfactants $ 2 MM

Drilling Fluids - MUD

Mud system $ 95 MM


$13

$14

$22

$27

$45

$49

$71

$72

$84

$97 MM

$469

$620

Vessels

Pumps

Turbines

Pipe Fittings

Instrumentation

Heat Transfer Equip

Electrical

Pipe

Compressors

Valves

Chemicals

Drilling


Average Annual

Spend

$97 Million

Check Valve17%

Butterfly Valve17%

Plug Valve18%

Ball Valve31%

Ball Valve

Valve; ball; split body; trunnion; steel $ 15 MM

Valve; ball; split body;steel;26 in & up $ 6 MM

Valve: ball;nps 26&up asme class 150&up $ 5 MM

Valve; ball; scraper launching; steel $ 3 MM

Plug Valve

Valve; plug; lubricated $ 15 MM

Valve; plug; steam jacketed; $ 2 MM


$6.7 Billion Historical Annual Material Spend






OOK Spend (Zero

IK MFRs)

23%

OOK & IK Spend

(1-2 IK MFRs)

32%

OOK & IK Spend

(3+ IK MFRs)

45%

Average Annual

Spend

$6.7 Billion*


$2

$7

$15

$41

$41

$51

$67

$168

$170

$243

$508

$831 MM

Vessels

Structural Steel

Pumps

Heat Transfer Equip

Electrical

Instrumentation

Pipe Fittings

Valves

Turbines

Pipe

Chemicals

Drilling

Material Spend with OOK & IK Sources (1-2 IK MFRS)

Average Annual

Spend

$831 Million

Csg Acc & Cement Eqpt

11%

OCTG-API & Semi Prem.

40%

Wellhead Prod Trees

17%

Gas Wellhead Eqpt20%

OCTG - API

Casing; octg; api gr; seam or erw $ 95 MM

Casing: octg; high nickel; seamless

$ 80 MM

Casing: octg; api gr; erw $ 70 MM

Casing: octg; api gr; saw $ 45 MM

Tubing: octg; api gr; seamless $ 34 MM

Gas Wellhead Eqpt

Spool assy: tubing; psl 3-4 $ 77 MM

Spool assy: casing $ 18 MM

Spool assy: casing head $ 18 MM

Bonnet: tubing; khf; 10-15m $ 12 MM

Hanger; assy: tubing; 10m-15m $ 10 MM

Mudline suspension: comp & assy

$ 10 MM


$2

$7

$15

$41

$41

$51

$67

$168

$170

$243

$508 MM

$831

Vessels

Structural Steel

Pumps

Heat Transfer Equip

Electrical

Instrumentation

Pipe Fittings

Valves

Turbines

Pipe

Chemicals

Drilling


Average Annual

Spend

$508 Million

Drllg Fluids – Mud48%

Drllg Cement Additive

17%

Drllg Chem –General

31%

Drllg Cement Additive

Cement and Additives $ 87 MM

Drllg Fluid - MUD

Oil Base Mud Products $ 242 MM

Drllg Chem- General

Fluid Loss Control $ 105 MM

Lost Circulation, Bridging Material $ 44 MM

Alkalinity control $ 5 MM

Corrosion Inhibitors $ 4 MM


$2

$7

$15

$41

$41

$51

$67

$168

$170

$243 MM

$508

$831

Vessels

Structural Steel

Pumps

Heat Transfer Equip

Electrical

Instrumentation

Pipe Fittings

Valves

Turbines

Pipe

Chemicals

Drilling


Average Annual

Spend

$243 Million

Pipe, Seamless CS52%

Pipe, ERW, CS23%

Pipe, Metal – other19%

Pipe, Seamless CS

Pipe; metallic; seamless $ 116 MM

Pipe; metallic; seamless; low temp $ 7 MM

Pipe: metallic, astm a106, seamless $ 3 MM

Pipe, ERW, CS

Pipe; metallic; hfw class b sour service

$ 47 MM

Pipe; metallic; hfw class c for sour gas

$ 9 MM

Pipe, Metal - other

Pipe; metallic; astm; any process, ss

$ 33 MM

Pipe: metallic, weld overlayed pipe $ 14 MM


10 Year Demand Forecast (Materials & Services)




Capital Program 10-Year Forecast ($37.3 Billion / Year)

10-Year Capital Program Forecast

Unconventional Resources

8%

Other4%

Pipeline3%

Infrastructure7%

Process Facilities12%

Maintain Potential14%

Drilling 52%

Disclaimer:This slide contains forward-looking statements regarding future events basedon current expectations, estimates, forecasts, and projections. The slide issubject to updating, revision, further verification and amendment withoutnotice. No reliance may be placed for any purpose on the information oropinions contained in this presentation or any other document or statement,or on the completeness, accuracy or fairness of such information or opinionstherein. No representation or warranty, express or implied, is made or givenby or on behalf of Saudi Aramco or its employees, or any other person as tothe accuracy or completeness or fairness of the information or opinionscontained in this presentation and no responsibility or liability is accepted byany of them for such information or opinions or for any errors, omissions,misstatements, negligent or otherwise, or for any communication written orotherwise, contained or referred to in this presentation.


Drilling Materials 10-Year Forecast

Trees 13,900 units

Hanger assemblies,33,000 units

Cement6.8 million tons

Mud Products (liquid)

636 million gallons

Casing heads 14,000 units

ICDS & ICD-screens

1.2 million units

Quantity Examples Percentage of Total Material Spend

Disclaimer:This slide contains forward-looking statements regarding future events based on current expectations, estimates, forecasts, and projections. The slide 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 thecompleteness, 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 suchinformation 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.

$66 Billion

ICDS & ICD-SCREENS, 14%

OCTG - API & Semi Premium,

6%

OCTG -Premium, 17%

Circulation Products , 6%

Workover/ Completion

Products, 5%TREE ASSY, 5%ISOLATION

PACKERS, 4%

SPOOL ASSY, 4%

Mud Products , 3%

Stabilizers, 3%

Weighting Materials, 3%

Additives , 2%

other, 27%


Drilling Services 10-Year Forecast

Rig Drilling Ops Services = $52.5 Billion


112

81

61

5

31

Oil -Onshore

Gas -Onshore

Oil -Offshore

Gas -Offshore

UR Well Services Total Spend $64.5 Billion

Directional Drilling

27%

Technical Services

22%Operations & Completion Services11%

Roads & Locations

5%

Logging9%

Monitoring & Testing

9%

Drilling Equipment Rental 9%

Casing / Tubing &

Handling, 4%

Cementing / Pumping

Services, 4%

Perforating


Renewables

Power

Oil Facilities

Pipeline

Other

Infrastructure

Refinery & Petrochem

Gas Facilities

Maintain Potential

Surface Facilities 10-Year Forecast

Disclaimer:This slide contains forward-looking statements regarding future events based on current expectations, estimates, forecasts, and projections. The slide is subject to updating, revision, further verification and amendment without notice. No reliance may be placed for any purpose onthe 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 SaudiAramco 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.

$40.3 Billion

$25.3 Billion

$25 Billion

$21.6 Billion

$16.3 Billion

$10.7 Billion

$9.9 Billion

$2.1 Billion

$1.1 Billion


BOILER PLANT EQUIP - 160 UNITS

PUMPS CS - 3,500 UNITS

LOW VOLTAGE CABLING - 56,000 KM

STORAGE TANKS - 1,000 UNITS

AIR COOLERS - 500 UNITS

COMPRESSORS - 500 UNITS

STAINLESS STEEL PIPING (SS314/316) - 137,000…

PROCESS VESSELS SS - 620 UNITS

CONCRETE - 24 MILLION M3

STRUCTURAL STEEL - 650,000 TONS

CONTROL VALVES - 90,000 UNITS

FIELD INSTR, ANALYZERS, GAGES - 70,000 UNITS

CS FITTINGS & VALVES - 19 MILLION UNITS

SS FITTINGS & VALVES - 6 MILLION UNITS

HEAT EXCHANGERS - 3,500 UNITS

CARBON STEEL PIPING - 23 MILLION TONS

PROCESS VESSELS CS - 6,000 UNITS

Surface Facilities Materials 10-Year Forecast (example)

Ball valves0.36 MM valves

2%

Check Valve0.17 MM valves, 1%

Gate Valves2.0 MM valves, 10%Pipe Fitting, CS, 16.6

MM fittings, 87%



BOILER PLANT EQUIP - 160 UNITS

PUMPS CS - 3,500 UNITS

LOW VOLTAGE CABLING - 56,000 KM

STORAGE TANKS - 1,000 UNITS

AIR COOLERS - 500 UNITS

COMPRESSORS - 500 UNITS

STAINLESS STEEL PIPING (SS314/316) - 137,000…

PROCESS VESSELS SS - 620 UNITS

CONCRETE - 24 MILLION M3

STRUCTURAL STEEL - 650,000 TONS

CONTROL VALVES - 90,000 UNITS

FIELD INSTR, ANALYZERS, GAGES - 70,000 UNITS

CS FITTINGS & VALVES - 19 MILLION UNITS

SS FITTINGS & VALVES - 6 MILLION UNITS

HEAT EXCHANGERS - 3,500 UNITS

CARBON STEEL PIPING - 23 MILLION TONS

PROCESS VESSELS CS - 6,000 UNITS

Surface Facilities Materials 10-Year Forecast (example)

0

20,000

40,000

60,000

80,000

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

Ball Valves – All Types

CS SS Non-Metallic

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2017201820192020202120222023202420252026

150 300 600 900 1500

0

10000

20000

30000

40000

50000

60000

70000

2017201820192020202120222023202420252026

<4" 4" - 24" > 24"



Agenda

iktva Baseline1







Material Limitations Definition

Limitations are specific restrictions that limits

the level of approval for a supplier against a

certain material.

The limitations are decided based upon the final

result of the technical evaluation of each facility.

Limitations could be on many aspects:

o Metallurgy

o Model type

o Size

o Thickness

o Engineering


Supplier Development Workbooks - Static Equipment example

Static Equipment

Common Limitations

• Thermal design

• Mechanical design

• Assembly & Welding

• Wall thickness

• Engineering design

• Fabrication only

• Size

• Metallurgy

• Pressure ratings

Manufacturer Name10 Years Forecast:

SR 87 B Initiative Lead:Local Business Development

Current Situation Future Situation (2021) Enablers

600000XXXX: TANK; SHOP FABRICATED.1) Only carbon steel2) Diameter up to 10 feet.3) Excluding dome roofs.4) Excluding external and internal floating roofs.600000XXXX: VESSEL; PRES.; MAX. WALL THK OF 19 MM. Tangent-to-Tangent length of pressure vessels is limited to 6 m maximum.

1. Different types of metallurgy.2. Flexible and dome roofs3. Various sizes and pressure

1. ES to work with supplier in developing capabilities to add 9COMs.2. Supplier must be willing to expand skillset, add 9COMs and ensure quality standards.3. Form a cooperative team between Saudi Aramco and the supplier to move forward.

Manufacturer Team Aramco Team Manufactrurer Notes

Unit Representative Unit RepresentativeDiscussion points and suggestions

Sample Workbook


Saudi Aramco Contact details

Limitations program, materials or capacity expansion for local facilities

Supplier Solution Center Unit [email protected]

New local businesses, market information

Local Business Development [email protected]

General Inquiries Supplier Help DeskTel.: [email protected]

iktva Inquiries www.iktva.sa/contact-us [email protected]

mailto:[email protected]


Thank you

iktva Program Framework & Business Opportunities Aramco: Public Agenda 1 iktva Baseline 2 5 Year...

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