Italy’s Saipem expects Aramco orders to drop 20%

Aramco

Italian energy contractor Saipem is forecasting a 20 percent decline in annual orders from Saudi Aramco to 2027 following the state-backed oil major’s decision to hold its capacity expansion plans.

Saipem had annual average orders of around €1.5 billion ($1.6 billion) from the Saudi-listed company between 2021 and 2023. It signed a 12-year deal with Aramco for onshore engineering and construction activities in 2020.

The new business plan includes a 20 percent cut in orders from Saudi Arabia compared with the previous period, Reuters reported, citing comments by CEO Alessandro Puliti in a post-results conference call.

• Oil service company shares dive on Aramco decision
• Aramco invests $6bn to bolster local supply chain
• Aramco will move oil spending to gas, chemicals and liquids

“We do not expect effects on our medium-term strategy,” he said.

Saudi Aramco in January received a directive from the energy ministry to maintain its maximum sustainable capacity at 12 million barrels per day (bpd) and not to raise it to 13 million bpd.

However, Aramco selected contractors for engineering, procurement and construction works on 16 of 17 programme packages worth $10 billion for its master gas system, one of the world’s largest hydrocarbon networks.

The oil producer also awarded a $3.3 billion contract to a joint venture between Spain’s Técnicas Reunidas and China’s Sinopec Engineering Group to develop new natural gas liquids fractionation facilities in the kingdom in January.