Towards a Global O&G Services HubTowards a Global O&G Services Hub

Local Content ForumMar 23, 2009

Presented by: Mr. Rashid Al Suwaiket

Towards a Global O&G Services HubTowards a Global O&G Services Hub

• Key Challenges• Where do we rank in terms of Local

Content?• One Step Forward: Energy Industrial Park• Recommendation

Oil & Gas Services- Key Challenges

• Access to technology• Strategy for oil and gas services industry• Market demand to compete and grow (economy of

scale)• Vocational training• Capital allocation vs. product approval and

purchasing commitment • Local content policies and legislations• Procrastination (time is money!)

4

Most MoslemCountries

GCC

Korea Advanced Countries

In

no

vati

on

en

able

rs

Followers Innovators

Malaysia

Adapters

Chile

Source: Islamic Development Bank

We need to jump start economic development strategies

5Source: Norwegian Min. of Pet. & Energy, Norwegian School of Management

22%

35%

55%

62.5%65%

70%

75%75%

85%Percent Local Content

O&G Services Local Content: Where do we rank?

US

A

Mex

ico

Iran

No

rway

UK

Bra

zil

Mal

aysi

a

KS

A

Ven

ezu

ela

0

10

20

30

40

50

60

70

80

90

One Step Forward

• Al-Khobar Enterprises Development (AKED) was formed in 2006:– Joint Stock Company– Mission: Business Development– Focus: Oil and Gas - Downstream and Upstream – Platform for establishing energy manufacturing and

support services

• 1st project is “Energy Industrial Park”

Energy Industrial Park

Energy Industrial Park

• World-Class Energy Industrial Park• 1.5 million m² land area within Dammam 2nd

Industrial City• 120 Manufacturing and services companies • Self-Contained: Manufacturing, Vocational and

Technical Educational Centers, Residential and Other Community Services

• State-of-the-Art Infrastructure

Energy Industrial Park- will be in operation by middle of 2011

• Signed the land lease agreement with MODON• Signed the Engineering Design & Supervision Agreement• Signed the Technical Service Agreement• Award the Construction Contract in December 2009• Project Completion in mid 2011• International corporations have expressed strong

interest

Value Proposition

Common User Supply Base Concept (CUSB)– Full-Service Logistics Capabilities to support and

assist associated companies– Shared services– Associated companies can focus on their core

business competencies & enhance efficiency levels– HSEQ rigorous standards – Common Vocational and Technical Training Center– Inventory management

Energy Industrial Park

Energy Industrial Park

Company Structure

AKED(51%)

OSC Limited(49%)

Rashid Al Suwaiket(Chairman)

Energy Industrial Park

Vocational and Technical Training Center

Vocational & Technical Training Centers

OSCC

Participating Companies

Long Term Indigenous Skills

Specialized Training Firms

Recommendation

Establish Oil and Gas Services Indigenization Task Force: 1. Ministry of Petroleum & Mineral Resources,2. Saudi Aramco (New Business Development and Materials

Supply)3. Private Sector

Objective: Develop local content incentives and policies for Oil &Gas services industry to grow and compete globally

– Achieving economies of scale– R&D Cooperation and Technology Indigenization – Long Term Indigenous Human Resources & Entrepreneurship

Development– Supply chain management

THANK YOU