American energy services company Baker Hughes will invest as much as 1 billion Saudi riyals (Dh980 million) in Saudi Arabia’s oil and gas sector, the kingdom’s investment authority said.
Baker Hughes, a unit of General Electric, will “build local manufacturing capabilities, support innovation, research and development, invest in Saudi talent, and pay close attention to the development of a global supply chain,” Saudi Arabian General Investment Authority (Sagia) said in a statement on the state-run Saudi Press Agency website.
The statement did not disclose the timeline for the investment or where the funding will be optimised.
Higher oil prices, which have recovered from a three-year slump, have led to increased upstream activity across the global energy sector. Benchmark Brent crude is hovering between $70 and $80 a barrel. Saudi Arabia, the world’s largest oil exporting country accounting for 12.9 per cent of global production has plans to invest as much as $300bn in upstream oil and gas projects over the next 10 years.
Baker Hughes was awarded an integrated services contract on the offshore Marjan field development by state oil company Saudi Aramco on Tuesday.
The company will begin work on the field’s capacity expansion this month, with the scope of contract including drilling, reservoir navigation and associated services.
Development of Marjan forms part of Saudi Arabia’s drive to ramp up production capacity offshore by 2023. These efforts will help the kingdom offset onshore decline and help maintain its production capacity at around 12 million barrels per day. Marjan, along with Berri and Zuluf fields, are on target for capacity expansion of more than a million bpd.
Development of spare capacity is critical for Saudi Arabia, which plays a significant role as a swing producer within Opec.