DUBAI: Saudi Arabia will require foreign firms working in the energy sector, including petrochemicals and water desalination, to boost local input to at least 70% in order to secure government contracts, three sources familiar with the matter said.
Energy Minister Prince Abdulaziz bin Salman discussed the plan to increase domestic input with local and international energy executives at a gathering in the Eastern city of Dammam last week, they said, confirming a video recording of his comments seen by Reuters.
He said the energy ministry would hold an event to announce the timeline, targets and mechanism for the plan, the latest effort to create new industries and generate jobs under Crown Prince Mohammed bin Salman's push to diversify the economy of the world's top oil exporter away from crude revenues.
Requirements for energy sector local content - which include workers, supplies and operations as well as added value - are currently around 30 to 35% but it is not clear how strictly these are enforced.
Authorities had already earlier this year handed foreign firms an ultimatum to set up regional headquarters by 2023 or risk losing out on government contracts in a bid to attract foreign capital and talent.