Aramco IPO could be open to world markets

Updated 25 January 2016

Aramco IPO could be open to world markets

DAVOS: An initial public offering of Saudi Aramco could be on the local or international markets but would not include Saudi energy reserves, the company’s chairman told Al-Arabiya channel.
“The reserves would not be sold, but the company’s ability to produce from the reserves is being studied,” Khalid Al-Falih told the channel in an interview from Davos.
Al-Falih said there would be legal studies to make sure that what is offered is not the Kingdom’s crude reserves “but the company’s ability to convert the production of these reserves to a financial value that the owners can benefit from.
“The economic value of Saudi Aramco as a company is what will be offered. Naturally, the primary field of Saudi Aramco’s work is managing the reserves of Saudi Arabia,” Al-Falih said.
“The reserves belong to the state but the company’s ability to convert these reserves... into a financial value and at the same time for the company to have a portion of these profits will be part of the value of the company,” he told Al-Arabiya.
In an interview with The Economist earlier this month, Deputy Crown Prince Mohammed bin Salman said Riyadh might sell shares in Aramco as part of a privatization drive.


Saudi defense contractor to invest up to $16 million to further localize services

Updated 18 November 2019

Saudi defense contractor to invest up to $16 million to further localize services

DUBAI: Saudi-based defense contractor Middle East Propulsion Company (MEPC) plans to invest between $13 million and $16 million over the next two years to build test cells for aircraft engines and establish new production lines.
These expansion activities should complement the company’s objective to localize high-tech repairs and combine them in one roof for the Saudi defense ministry, which is a major customer, CEO Abdullah Al-Omari told Arab News.
Instead of sending aircraft engines and engines modules overseas for further servicing, thus take up more time before military assets return to actual service, localization not only cuts the turn-around period but also reduces Saudi government spending for the repairs.
“We have accomplished more than 1,600 engine and engine modules [since 2001, they] have been maintained totally in Saudi Arabia,” Al-Omari said at the sidelines of the Dubai Airshow. “The engines consume 45 percent of what you spend on aircraft.”
The company works on 150 to 160 engines and engine modules every year.
MEPC is the first specialized MRO (maintenance, repair and overhaul) company operating in the Middle East, according to its website. It has invested over $26 million during the previous two years for the localization of its MRO services.
“We used to send these parts to outside, it takes 6 months to 24 months sometimes … in case of the Apache engines, minimum turn around is 24 months,” Al-Omari said, but their localization efforts have greatly improved their capability by cutting the turn-around period to only 150 days.
The speed at which MEPC is able to repair engines and modules, boosts the readiness of Saudi military, Al-Omari added.
The company is in talks with major defense contractors, including Honeywell for the Abrams talks and GE T700 engines, for possible tie-ups to further improve their capability, he said.
“Currently there is a potential with the Kuwait army to provide them with similar services [being delivered to the Saudi defense ministry],” Al-Omari said, and expects that cooperation would start “within the next two years or so.”