- McDermott is the only EPCI contractor attending the forum
- MOU outlines McDermott’s nine initiatives in support of Aramco’s In-Kingdom Total Value Add (IKTVA) initiative
- MOU further demonstrates McDermott’s commitment to Saudi Arabia’s 2030 vision
RIYADH, Saudi Arabia, May 20, 2017 (GLOBE NEWSWIRE) -- McDermott International, Inc. (NYSE:MDR) announced today it signed another memorandum of understanding (MOU) with Saudi Aramco to expand and develop the company’s physical and human capital within Saudi Arabia as part of Aramco’s In-Kingdom Total Value Add (IKTVA) initiative.
The MOU was signed as part of the first ever Saudi-U.S. CEO Forum. McDermott was the only engineering, construction, procurement, and installation (EPCI) services contractor attending the summit along with other major U.S. business leaders. The forum was organized to coincide with U.S. President Donald Trump’s visit to Saudi Arabia. At the forum, Saudi ministers and CEOs from major U.S. companies met to discuss expanding business between the U.S. and Saudi Arabia.
The MOU demonstrates McDermott’s support of Saudi Arabia’s Vision 2030 and Aramco’s IKTVA program. The Company has committed to a nine-initiative plan to increase its contribution to the country’s localization efforts and aid Saudi Aramco in meeting its 2021 objectives. McDermott plans to increase the number of Saudi nationals in its Middle East workforce to 40 percent by 2030.
“Today’s announcement enhances our deep-rooted relationship with Saudi Aramco, our largest customer, and further demonstrates our commitment to Saudi Arabia and its vision,” said David Dickson, President and Chief Executive Officer of McDermott. “As part of our global strategy to enhance our capabilities and deepen customer relationships, this MOU strengthens our long-term plans to transition our Middle East operations to Saudi Arabia, which we believe positions us competitively in the regional market."
McDermott’s nine-initiative plan expands the Company’s local supply chain, develops full-scale fabrication and marine facilities and moves area operations to Saudi Arabia and provides career training and development opportunities for highly-skilled Saudi nationals.
“These initiatives underpin our long-term goal to significantly grow our business not just in Saudi Arabia, but regionally,” said Linh Austin, McDermott’s Vice President, Middle East and Caspian. “This also builds on our recent efforts to increase Saudi Arabian-based fabrication and engineering through the opening of our new yard in Dammam and office in Al Khobar, as well as locally-sourced procurement.”
McDermott believes the potential value of the MOU is approximately $2.8 billion USD and will create up to 2,000 jobs over the next several years.
Saudi Aramco launched the IKTVA program in 2015 to expand Saudi Arabian-based business operations to help drive domestic value creation and maximize long-term economic growth, diversification, job creation and workforce development to support a rapidly changing local economy.
McDermott has extensive experience offshore Saudi Arabia, having worked in the region for more than 50 years.
About McDermott
McDermott is a leading provider of integrated engineering, procurement, construction and installation (“EPCI”), front-end engineering and design (“FEED”) and module fabrication services for upstream field developments worldwide. McDermott delivers fixed and floating production facilities, pipelines, installations and subsea systems from concept to commissioning for complex Offshore and Subsea oil and gas projects to help oil companies safely produce and transport hydrocarbons. Our customers include national and major energy companies. Operating in approximately 20 countries across the world, our locally focused and globally integrated resources include approximately 13,500 employees, a diversified fleet of specialty marine construction vessels, fabrication facilities and engineering offices. We are renowned for our extensive knowledge and experience, technological advancements, performance records, superior safety and commitment to deliver. McDermott has served the energy industry since 1923, and shares of its common stock are listed on the New York Stock Exchange. To learn more, visit our website at www.mcdermott.com.
Forward-Looking Statement
In accordance with the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, McDermott cautions that statements in this press release which are forward-looking, and provide other than historical information, involve risks, contingencies and uncertainties that may impact McDermott's actual results of operations. These forward-looking statements include, among other things, statements about: McDermott’s commitments to Saudi Arabia’s Vision 2030 and IKTVA program; the details regarding the transactions contemplated by the MOU; the expected benefits to be derived from the MOU; our beliefs with respect to competitive positioning in the Middle East market; the number of Saudi nationals that will comprise McDermott’s Middle East workforce; the expected timing and results of implementing McDermott’s IKTVA plan; and McDermott’s beliefs with respect to the potential value and job creation resulting from the MOU. Although we believe that the expectations reflected in those forward-looking statements are reasonable, we can give no assurance that those expectations will prove to have been correct. Those statements are made by using various underlying assumptions and are subject to numerous risks, contingencies and uncertainties, including, among others: our inability to successfully execute on our IKTVA plan, adverse changes in the markets in which we operate or credit markets, the effects of competition, actions of third parties and changes in conditions and other factors affecting our industry. If one or more of these risks materialize, or if underlying assumptions prove incorrect, actual results may vary materially from those expected. For a more complete discussion of these and other risk factors, please see McDermott's annual and quarterly filings with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended December 31, 2016 and subsequent quarterly reports on Form 10-Q. This press release reflects management's views as of the date hereof. Except to the extent required by applicable law, McDermott undertakes no obligation to update or revise any forward-looking statement.