McDermott Signs Strategic MOU to Construct Offshore Production Solutions in Saudi Arabia

McDermott International, Inc. (NYSE:MDR) has announced it plans to construct offshore production solutions in Saudi Arabia. McDermott signed a memorandum of understanding with Saudi Aramco for a long-term land lease at the new maritime facility at Ras Al Khair in Saudi Arabia, currently being developed by Saudi Aramco.

With a long-term phased approach, McDermott plans to build a new fabrication and marine complex expected to use state-of-the-art facilities, increased automation and an optimized layout to increase McDermott’s abilities to service its growing Middle East and Caspian markets.

“We are excited about this strategic move and believe it expands and strengthens our ability to service all our growing Middle Eastmarkets and our decades-long leadership position with Saudi Aramco and in the Middle East,” said David Dickson, McDermott’s President and Chief Executive Officer. “When we look at our next 50 years of business in the Middle East, we see strong benefits to moving our business operations to Saudi Arabia, including the opportunity to modernize our facilities, move closer to Saudi Aramco and other key customers in the region as well as provide McDermott’s world-class training programs to Saudi Arabia’s talented workforce to further enhance McDermott’s Middle East operations.”

McDermott expects to expand its capabilities and capacity in the region to serve its customers in offshore and subsea markets throughout the Middle East, Caspian and other markets in the Eastern Mediterranean Sea and offshore India and East Africa. The future fabrication facility at Ras Al Khair is expected to provide up to 16-million manhours of capacity, up from 8-million manhours at McDermott’s current Jebel Ali facilities, with a gradual transition from McDermott’s operations in Jebel Ali expected by the mid-2020s.

The move also demonstrates McDermott’s support of Saudi Arabia’s Vision 2030 and Saudi Aramco’s In-Kingdom Total Value Add (IKTVA) program. The IKTVA program intends to expand KSA-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 Saudi economy.