RIYADH, 22 October 2007 — Makamin, the newly established SR1.2 billion oil and gas service company, has announced that it will compete with foreign companies not only in oil exploration and drilling but also go into the manufacture of equipment and spare parts required by the sector.

“Our company will also engage in marine drilling operations. Our feasibility studies have shown that there is a huge potential for onshore and offshore drilling, since the demand for oil has been growing dramatically,” Usama Al-Kurdi, member of the Shoura Council and board member of the Makamin, told Arab News.

He said the company has concluded a strategic alliance agreement with Shengly Oilfield Co., one of the subsidiaries of China’s Sinopec, a major oil company. This agreement makes them partners in the operations at Makamin.

“We have created a significant technical team that will eventually run the company in line with some standard procedures. It is a highly qualified team with a wealth of experience in the field of oil and gas services. Between them (Shengly and Sinopec) they pool more than a hundred years of experience in this sector.”

Makamin was the brainchild of Takween, a company that specializes in project development in the oil & gas sector, Al-Kurdi said. “Makamin is dedicated to providing services in the oil & gas sector in the Kingdom in particular and Gulf states in general. We hope that in future we’ll expand to other countries. Its activities will include all related fields in oil and gas or the oil field itself. At a later stage it will undertake manufacture of components required by the industry. This will include everything that has to do with power, water, drilling and pipe laying besides carrying out seismic survey.”

He said that to start with, they have decided “that Makamin will start its operations with drilling, hoping that we’ll be able to expand into other sectors in future. To this end, we are engaged in obtaining advisory services for conducting feasibility studies for drilling activities, which have proved to be quite profitable.”

Al-Kurdi said that their cooperation with Shengly will create another area in which Saudi-Chinese economic cooperation has been developing dramatically following the landmark visit of Custodian of the Two Holy Mosques King Abdullah to China and the return visits of the Chinese president and the prime minister to the Kingdom. This has created a great deal of interest among the Chinese companies in doing business with our country. An offshoot of this development was the joint venture between Makamin and Shengly.

He pointed out that the company has already been registered with the Ministry of Commerce and Industry. “We are now in the process of completing the process of subscription to the company’s share capital amounting to SR1.2 billion, which will be completed in the next few weeks. Once the subscription is completed, we shall finalize our future operations.”

Al-Kurdi further said: “There is no plan for an IPO at this time. Maybe, in the future. The two major shareholders are Shengly and Takween. Other shareholders, which include some investors from the GCC states, have been listed. The process will be completed in due course.”

He said the potential was huge. “Right now, the reserve capacity is extremely low. That may be one of the reasons why the oil price is running so high. So many companies are developing their exploration and drilling operations, both onshore and offshore.” The company was also planning to enter into the manufacture of components and equipment required by the oil and gas sector. This will lead to import substitution in areas where equipment were currently being imported.

“The opening up of the international economy thanks to the WTO has created a situation in which the demand for goods and services exceeds supply. This is not only due to the increase in the purchasing power of the people but also due to the population growth. On top of it, you have the rise in oil prices.”