Italian energy engineering firm Saipem has landed two major offshore contracts in Saudi Arabia, valued at approximately $1 billion. The contracts fall under an existing long-term agreement with Saudi Aramco, signed in 2020, for onshore engineering and construction activities. Saipem‘s latest deal emphasizes its role in the Kingdom’s oil and gas sector.
Significant Projects in Key Oil Fields
The contracts involve the engineering, procurement, construction, and installation (EPCI) of infrastructure at the Marjan, Zuluf, and Safaniyah oil fields. The first contract includes the EPCI of three production deck modules, 33 kilometers of subsea pipelines, and 34 kilometers of subsea power cables at the Marjan field. The second contract focuses on the EPCI of three jackets, five production deck modules, 22 kilometers of subsea pipelines, and 35 kilometers of subsea power cables at the Zuluf and Safaniyah fields.
Boosting Local Industry
Saipem will execute the fabrication work at its Saudi fabrication yard, Saipem Taqa Al-Rushaid Fabricators Co. This effort aligns with Saudi Arabia’s goal of increasing domestic industry capabilities, further solidifying Saipem’s long-standing relationship with Aramco.
Financial Impact and Industry Standing
Saudi Aramco recently reported a slight dip in its second-quarter net profit, down 3.4% to $29 billion, despite a 5.8% increase in revenue to $113.4 billion. Meanwhile, Saipem recorded first-half revenue of $7.1 billion, reflecting a 20% year-on-year increase. Saipem also secured $7.7 billion in new contracts during the first half of 2024, underscoring its robust performance.
A Strategic Partnership
The collaboration between Saipem and Saudi Aramco is not new, as Saipem has consistently averaged annual orders of around $1.66 billion from Aramco between 2021 and 2023. The new $1 billion contracts further reinforce Saipem’s strategic position in Saudi Arabia’s energy sector, contributing significantly to the Kingdom’s ambitious Vision 2030 goals.
