McDermott and Saudi Aramco Announce Memorandum of Understanding at the First Saudi-U.S. CEO Forum
May 20 2017 - 8:00AM
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 McDermottMcDermott 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 StatementIn 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.
McDermott International, Inc.
Investor Relations
Ty Lawrence
Vice President, Treasurer and Investor Relations
+1 281.870.5147
tlawrence@mcdermott.com
Media Relations
Adam Morgan
Director, Global Communications
+1 281.253.9005
amorgan@mcdermott.com
Local Middle East
Emily Beadon
Communications, Middle East Area
+971.4.804.3140
ehbeadon@mcdermott.com
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