March 22, 2016

Supply Chain OpportunitiesOil & Gas

2

Saudi Aramco: Confidential

Objective

Share spend plan of $33 billion each year

Present opportunities

Drive development of local supply chains

3

Saudi Aramco: Confidential

Business EnvironmentOil & Gas Wells

718838

1,1421,233 1,242 1,299 1,338

0

500

1,000

1,500

2012 2013 2014 2015 2016 2017 2018

4

Saudi Aramco: Confidential

Opportunities

Average Spend / Year is 33 Billion USD

31%

11%42%

10%

6%

Surface Facilities

Infrastructure

Drilling

UR

Other

$334 Billion

5

Saudi Aramco: Confidential

Building on Successannual spend with US contractors

2015 - $5.58 billion

2014 - $5.7 billion

2016 - $ 4.0 billion

US contractors registered with Saudi Aramco – 6,993

Active contracts with US contractors - 552

6

Saudi Aramco: Confidential

Building on Successannual spend with US manufacturers

2015 - $1.34 billion

2014 - $1.52 billion

2016 - $ 1.37 billion

This participation can grow

7

Saudi Aramco: Confidential

Local Supply Chainsa step change

Local content spend: 35%

Status quo is not good enough

A step change in our commitment

8

Saudi Aramco: Confidential

Local Supply Chainscritical objectives

Double local content to 70% by 2021

Export 30% goods and services

9

Saudi Aramco: Confidential

Local Supply Chainswhy change?

Current model is unsustainable

Build long-term partnerships

Invest in long-term prosperity

Create long-term employment opportunities

10

Saudi Aramco: Confidential

Local Supply Chainshow we will succeed

Formal mechanism for fair competition

In-Kingdom Total Value Add: IKTVA program

Systematic, fair, transparent

Local content at the heart of the procurement process

A requirement of doing business

11

Saudi Aramco: Confidential

Local Supply Chainshow we will succeed

IKTVA will be assessed by the following metrics:

A. Procurement of localized goods and services

B. Salaries paid to Saudis

C. Costs incurred training & developing Saudis

D. Supplier development spend

12

Saudi Aramco: Confidential

Local Supply Chainshow we will succeed

Supplier IKTVA Formula:

% IKTVA = 𝑨+𝑩+𝑪+𝑫

𝑬∗ 𝟏𝟎𝟎

A. Procurement of localized goods and services

B. Salaries paid to Saudis

C. Costs incurred training & developing Saudis

D. Supplier development spend

E. Revenue

13

Saudi Aramco: Confidential

Local Supply Chainshow we will succeed

Cornerstone of RFQs

Integral to Technical Proposals

A costed deliverable

14

Saudi Aramco: Confidential

Local Supply Chainshow we will succeed

Designed IKTVA to attract global partners

Improving education

Ensuring regulations help business

15

Saudi Aramco: Confidential

Local Supply Chainshow we will succeed

Promoting economic and industrial diversification

Widening and deepening the supply chain

Encouraging ‘clusters’

Promoting SMEs

16

Saudi Aramco: Confidential

IKTVA – a true win-win proposition

Opportunity to capture the major share of Saudi Aramco spend

Local Supply Chainshow we will succeed

17

Saudi Aramco: Confidential

Local Supply Chainshow we will succeed

$334 Billion Spend

Increase oil and gas reserves

Invest in maintaining MSC

Increase gas production

18

Saudi Aramco: Confidential

Local Supply Chainshow we will succeed

0

5000

10000

15000

20000

25000

30000

35000

40000

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

PM PM-Civil Drilling Unconv. Gas Exploration

$334 Billion Spend

19

Saudi Aramco: Confidential

Upstream

Jazan refinery & power plant

5 new bulk plants

Chemical value parks:

o SADARA

o PetroRabigh

6 Power generation plants

Local Supply Chainshow we will succeed

20

Saudi Aramco: Confidential

Saudi Arabian Company for Industrial Development

Technovia

Positive business environment

Multiple opportunities

Local Supply Chainshow we will succeed

21

Saudi Aramco: Confidential

We have to change

IKTVA ensures the change

Strategic, sustainable and successful relationship

Local Supply Chainshow we will succeed