SAUDI ARABIA: OVERVIEW, UKTI SUPPORT, OPPORTUNITIES. Subsea Expo February Steve Graham, Head of British Trade Office, Al Khobar

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1 SAUDI ARABIA: OVERVIEW, UKTI SUPPORT, OPPORTUNITIES Subsea Expo February 2014 Steve Graham, Head of British Trade Office, Al Khobar

2 SAUDI ARABIA: OVERVIEW King Abdulla Bin Abdul Aziz Al Saud Custodian of the Two Holy Mosques Population Land area 28 million 2,149,690 sq km GNI per capita (2013) ($) 18,030 Oil Production Electricity Consumption Budget 2014 (announced Dec 13) Approx 10 million bpd 7800 kw - per capita ($) 228 billion

3 SAUDI ARABIA: KEY FACTS Strategically located in the heart of the Middle East. 60 Million potential consumers in the Arabian Peninsula and more than 300 Million in the Middle East. 100% foreign ownership. No personal income tax. Corporate tax - 20% on profits. Customs exemption: machinery, raw materials imported for manufacturing. Accounts for 25% of the Arab world s GDP. Favourable rents for industrial projects. No restriction on repatriation of profits. Ranks 26 th (2014 IFC World Bank report) in the Ease of doing Business Index. 18 th most competitive country in the world. Home to the GCC Central Bank. Largest stock market in the Gulf. It is the largest recipient of FDI in the Arab world.

4 SAUDI ARABIA: KEY SECTORS Oil, Gas & Petrochemicals Power Renewable Energy & Nuclear Construction & Infrastructure Education & Training Healthcare Services Mining Railways Water & Environment

5 SAUDI ARABIA: DOING BUSINESS CHANNELS FOR BUSINESS Direct Sales Agent/Distributor Foreign Investment License Limited Liability Company (alone or with Saudi partners). Branch Office Scientific Office Joint Stock Company (high capital projects). Temporary Commercial Registration (government contracts).

6 SAUDI ARABIA: DOING BUSINESS WHAT DO SAUDI COMPANIES WANT TO HELP YOUR BUSINESS GROW? Niche goods & services. Quality. Commitment/Capacity/ Capability. Partnerships. USPs. Innovation. Technology transfer. Reliability & integrity. VFM price sensitive market.

7 SAUDI ARABIA: DOING BUSINESS The family nature of most significant business in Saudi Arabia extenuates the importance of relationship building. Take your time. Undertake due diligence; History/Financial stability? Geographic coverage? Human resources/saudisation IT utilisation? Reputation? Connections in the market, especially with Saudi Aramco, Sabic, SEC and various ministries? References?

8 SAUDI ARABIA: DOING BUSINESS DOs DON Ts Understand that the decision making processes & culture is different. Invest in relationship building. Evaluate your business partner thoroughly. Understand the corporate structure, and identify key decision makers. Take local legal advice (Sharia legislation). Visit, visit, visit! Sign-up with the first partner you meet - beware of agency collectors. Expect responses. Hurry be patient. Generalise. There are many differences between East, West and Central Province. Think big is best for your products or service.

9 EASTERN PROVINCE Dhahran: Centre of the oil & gas industry; home to Saudi Aramco, the world s largest fully integrated oil company, and Saudi s prestigious university (KFUPM). 60% of Saudi Oil production in EP. Dammam: Capital of Eastern Province & major seaport. Home to Saudi Railways Organization. Al Khobar: Major trading centre. Jubail: World s largest industrial city and home to Sabic. Produces 7% of the world s petrochemicals which represents 85% of Saudi Arabia s non oil exports. Home of Sadara.

10 SAUDI ARAMCO Based in Dhahran, Eastern Province Oil production: 9.5m bpd aver 2012 Gas production: 10.7b scfd 2012 (requires significant increase) Employees: 54,000 from 77 countries Number one ranking in Petroleum Intelligence Weekly s (PIW) annual rankings ( ) of the world s 50 largest oil companies. Offices worldwide specifically Aramco Overseas Company: The Hague & London. Aberdeen Technology Office. SAUDI ARAMCO S GENERAL SOURCING REQUIREMENTS FROM WESTERN EUROPE CAN BE FOUND ON AOC S WEBSITE

11 SAUDI ARAMCO: OPPORTUNITY OVERVIEW Includes: Electrical and mechanical equipment, Pipes, Instrumentation, Chemicals Tanks, Process vessels, Valves, Tubing, Fittings, and Heat transfer items. The website also shows urgent items currently being sourced.

12 SUBSEA OPPORTUNITIES Conventional: Offshore Gulf. Max 100 metres water depth. Supply chain already in place. Opportunities for increasing/maintaining production and innovative/niche items. Limited other potential. Red Sea Project: Approx US$ 1 billion in 2D,3D and WA seismic. Deepwater Expedition (contract Nov12 Nov14). Looking for Gas requirement (Aramco strategy - shale first). Fluids capped. Testing current well (no. 3) now. No real well programme case by case basis. This is new to them Limited corporate experience deepwater subsea. Limited corporate planning expertise E&P but, specifically development. Opportunities across the piece. Project planning, services, equipment, personnel etc Timing: Now 3 6 years.. Way forward?

13 SAUDI ARAMCO: FIRST STEPS You could... Contact BTO in Al Khobar our services/research/visit programme. Contact our strategic partners SDI, INI, EIC, NOF, Subsea UK, ITA s in England etc Contact our UKTI oil and gas business specialists Phil Haymes Follow up with a visit to the Kingdom with Trade Mission/Showcase event Speak to ARAMCO Aberdeen Technology Office Find out more about - Saudi Aramco Energy Ventures ( Our mission is to invest globally into start up and high growth companies with technologies of strategic importance to Saudi Aramco and to accelerate their development and their deployment in the Kingdom

14 Saudi Aramco Registration

15 TRADE MISSIONS AND SHOWCASE TRADE MISSIONS UKTI NW, Yorkshire, East of England, Scottish Development International EIC & MEED Subsea UK SAUDI-BRITISH ENERGY WEEK: Al Khobar, 1-4 December 2014 British Business Association of the Eastern Province BRITISH OFFSET Help with JV s.

16 Contacts and links BRITISH TRADE OFFICE AL KHOBAR Steve Graham, Head of the British Trade Office Bill Kelly, Deputy Head of the British Trade Office THANK YOU FOR YOUR ATTENTION