Saipem lands a major contract with Saudi Aramco for the Marjan oil field, focusing on offshore infrastructure, boosting local capabilities, and enhancing sustainable energy practices

Italian engineering giant Saipem has secured a $2 billion offshore contract with Saudi Aramco, marking a significant milestone in the development of Saudi Arabia’s Marjan oil field. The project falls under Saipem’s Long-Term Agreement (LTA) with Saudi Aramco, reinforcing the company’s ongoing collaboration in the region. This contract involves a wide array of engineering, procurement, construction, and installation services. Saipem will focus on developing key offshore infrastructure, including wellhead platforms, flowlines, and subsea cables, all of which are crucial components of Saudi Arabia’s energy production strategy.

Leveraging its advanced fleet and state-of-the-art welding technology, Saipem plans to execute a substantial part of the fabrication work at the Saipem Taqa Al-Rushaid Fabricators Co. yard, located in Dammam. This move not only emphasizes Saipem’s commitment to local industry development but also boosts Saudi Arabia’s domestic capabilities by enhancing the region’s technological and operational expertise.

The Marjan project is the latest in a series of contracts awarded to Saipem by Saudi Aramco, reflecting a long-standing relationship and mutual trust between the two energy industry leaders. Saipem’s continued involvement in Saudi Arabia underscores its leading role in global energy infrastructure, with a particular focus on sustainable engineering solutions that align with Saudi Arabia’s Vision 2030 goals.

With over 30,000 employees across more than 50 countries, Saipem is a major player in the energy sector, listed on the Milan Stock Exchange. The company’s expertise spans multiple facets of energy infrastructure, from oil and gas to renewable energy, making it a key partner in both conventional and sustainable energy projects around the world.

Analysis

Political: This contract is a significant step forward in the long-standing relationship between Italy’s Saipem and Saudi Arabia’s national oil company, Saudi Aramco. The deal aligns with Saudi Arabia’s broader geopolitical and economic ambitions under its Vision 2030 framework, which aims to diversify the Kingdom’s economy away from oil dependence while maintaining leadership in the global energy sector. By working with foreign companies like Saipem, Saudi Arabia is securing the technical expertise required to continue developing its vast oil reserves while also preparing for a future where sustainability will play a larger role in energy production.

Social: This contract highlights Saudi Arabia’s growing emphasis on local workforce development and industry capabilities. The decision to carry out a significant portion of the fabrication at the Dammam facility reflects the Kingdom’s strategy to invest in its domestic industrial base. By increasing local content in major infrastructure projects, Saudi Arabia is creating job opportunities and building the expertise of its workforce, empowering citizens to participate more actively in the Kingdom’s industrial growth. This focus on local capacity-building is vital for the nation’s social and economic future.

Economic: The $2 billion contract with Saipem signifies a major economic investment in Saudi Arabia’s oil sector. Projects like the Marjan oil field development not only sustain oil production capacity but also enhance the infrastructure necessary to maintain long-term energy output. The involvement of Saipem Taqa Al-Rushaid Fabricators Co. in Dammam will further boost the local economy by creating jobs and stimulating industrial growth. This project serves as a testament to Saudi Aramco’s investment in long-term energy projects, ensuring that the country remains a global leader in oil production while also working towards more sustainable energy solutions.

Environmental: While the Marjan oil field project remains focused on traditional oil production, Saipem’s commitment to sustainable engineering solutions plays an important role in Saudi Arabia’s evolving approach to energy infrastructure. As part of its broader Vision 2030 objectives, the Kingdom is looking to integrate more environmentally conscious practices into its oil and gas operations. Saipem’s involvement in this contract demonstrates the industry’s shift towards reducing environmental impact, with the use of advanced technology helping to optimize efficiency and potentially reduce emissions during the construction and operational phases of the project.

Technological: Saipem’s cutting-edge technology, especially its advanced fleet and welding techniques, is central to the execution of this massive offshore contract. The development of wellhead platforms, flowlines, and cables requires high levels of precision and innovation, areas where Saipem has consistently proven its expertise. The involvement of the Dammam fabrication yard adds another layer of technological growth to Saudi Arabia’s local industries, enabling the transfer of knowledge and skills to Saudi workers and companies. This partnership will likely lead to new technological advancements in offshore infrastructure development, benefiting both the Kingdom and Saipem on a global scale.