Aramco and DHL form joint logistics company
8 February 2024
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Supply chains have become a key issue for businesses over the past three years as the global economy emerged from Covid-19 lockdowns and then faced disruptive events such as the grounding of the EverGiven in the Suez Canal and the war in Ukraine.
More recently, Houthi attacks on shipping passing through the Red Sea have forced many vessels to travel around Africa rather than through the Suez Canal. This has delayed deliveries and driven up costs.
These disruptions, together with technological advances such as AI and a growing emphasis on sustainability, are forcing logistics providers and their customers to rethink how their supply chains are managed.
Locally in Saudi Arabia, the supply chain challenge is of particular importance as the kingdom seeks to overhaul its economy with large-scale capital expenditure projects as part of Vision 2030.
Joint venture
Two of the world’s largest players in their respective fields, Saudi Aramco and DHL Supply Chain, are responding to these challenges and aim to revolutionise logistics for the energy, chemical and industrial sectors by joining forces to incorporate a new joint venture company known as Asmo.
Salem Al Huraish, chairman of Asmo, described the new company in a speech at its launch in Khobar on 5 February as “a national champion that will reform the supply chain industry for the energy, chemical and industrial sector in the region.”
The company involves two industry heavyweights combining their expertise. “Aramco is a massive procurement beast, and is very successful. DHL is a logistics company. Everybody does their respective pieces separately,” said Craig Roberts, CEO of Asmo.
“Bringing the two together in a separate entity is something that hasn’t been done before. We believe there are massive efficiencies for the industry from doing this.”
The company, which has been planned for three years, comes at an opportune time for Aramco and DHL, but also for Saudi Arabia and the global logistics sector.
“We are launching a company with an ambitious vision to become a market leader in the Mena region,” said Wail Al Jaafari, Aramco executive vice-president of technical services.
“Asmo can offer world-class end-to-end supply chain solutions, creating value for customers while enhancing the resilience of their supply chain.”
New technologies
As well as changes in Saudi Arabia, the nature of the logistics industry is being transformed by new technologies, notably artificial intelligence (AI).
“We stand at a defining junction of the logistics industry where global trends are dramatically reshaping the landscape,” said Oscar de Bok, CEO of DHL Supply Chain. “The world is grappling with supply chain disruption, rising costs and the urgent goal for sustainability.”
Asmo intends to take a smart approach to revolutionising supply chain logistics. “It’s a lot about being smart,” said De Bok. “We talk a lot about deploying technology, digital marketplaces and warehouse technology … there is a lot of cool stuff being deployed, but it is not always rocket science. Some of it is pretty basic stuff you need to do,” he said.
The journey for Asmo is just beginning. It is a long-term venture that aims to develop a significant presence in the kingdom over the coming years.
“We are in partnership together and at the start of that journey right now,” Roberts added. “We are looking at our supply chains, gaining insights and asking how we get smarter. When we build in new warehouses, the question is, where do you put them? What technology do we deploy? We are in that discovery phase right now.”
One of the critical aspects of Asmo’s strategy involves assessing physical infrastructure needs. “For physical infrastructure, Asmo is assessing its options. We are looking at that right now. Aramco has a number of facilities for itself and its affiliates. We are looking at the best places to put the warehouses,” Roberts said.
Saudi infrastructure
As well as Asmo’s dedicated infrastructure, the Saudi government is also building infrastructure to support the kingdom’s logistics industry. “They’re putting infrastructure in place. They’re making it quite easy for us to do this. I think the support of the government is vital,” he said.
Once established in the kingdom, Asmo aims to take its operations overseas. This is likely to involve expanding into other GCC markets first and then further afield. Both Aramco and DHL can support this strategy as both companies have significant operations outside Saudi Arabia. DHL is a global logistics player, and Aramco, while primarily being a Saudi company, has operations in many other markets worldwide, including the US.
If Asmo gets it right, the rewards are significant. “The supply chain and logistics market in the Mena region is worth around $100bn. Our goal is to have a major share of this. It is truly a new giant in the making,” said Al Jaafari.
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Haroon is a dual-qualified Chartered Quantity Surveyor (FRICS) and barrister with over 18 years of experience in the construction industry. He leads HKA’s Construction Claims and Expert Services Line across Europe, the Middle East, and Africa, overseeing a team of more than 200 consultants with responsibility for strategy and delivering the growth plan. His practice focuses on the resolution of complex and high-value construction disputes. He has been appointed as a quantum expert and has delivered expert testimony in international arbitration and litigation, including in the Kingdom of Saudi Arabia. Haroon is known for his ability to analyse, quantify, and communicate the financial aspects of construction claims with clarity and independence.https://image.digitalinsightresearch.in/uploads/NewsArticle/16116602/main.gif -
Diriyah tenders media district north offices
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Ashghal tenders more infrastructure contracts
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Qatar’s Public Works Authority (Ashghal) has issued two tenders covering infrastructure development in the northern section of the New Industrial Area and the Wadi Al-Banat area.
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War likely to boost oil and gas activity in North Africa
25 March 2026
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The US and Israel’s ongoing war with Iran is likely to boost oil and gas project activity in North Africa, as the high-price environment encourages the region’s national oil companies to push ahead with projects that will allow them to increase exports.
In recent weeks, international oil and gas prices have stayed consistently far higher than levels seen before the US and Israel launched their attack on Iran on 28 February, killing Iran’s Supreme Leader, Ali Khamenei.
For the past two weeks, the price of Brent crude has remained above $90 a barrel and has hit a high of more than $109.
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Over the same period, the long-term outlook for oil and gas exports from the GCC and Iraq has dimmed significantly as disruption to transport through the Strait of Hormuz has continued and damage to key regional oil and gas infrastructure has increased.
Damage to infrastructure has included attacks on oil and gas fields, as well as strikes on oil refineries, storage facilities and gas processing plants.
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On 18 March, Saad Sherida Al-Kaabi, QatarEnergy’s CEO and minister of state for energy affairs, said Iranian strikes on Ras Laffan Industrial City – home to the world’s largest liquefied natural gas (LNG) production and export facility – had knocked out about 17% of its LNG export capacity.
He said the attacks were expected to cause an estimated $20bn in lost annual revenue and that repairs could take three to five years to complete.
In Bahrain, the Sitra oil refinery, which has a throughput capacity of 405,000 barrels a day (b/d), has been attacked and damaged, leading Bapco to declare force majeure.
Strikes also hit the Ras Tanura refinery in Saudi Arabia, as well as the Habshan gas processing complex in the UAE.
North Africa
The high-price environment and the long-term impact of the ongoing conflict represent an opportunity for North Africa’s oil-producing nations, especially the region’s biggest oil and gas exporters: Algeria and Libya.
Higher prices will dramatically increase government revenues for these countries, giving them more capacity to invest in infrastructure projects, while also providing a significant financial incentive to boost production in the short term.
Both Algeria and Libya are close to European markets that have relied on oil and gas from the GCC and Iraq, and neither country relies on the Strait of Hormuz to transport exports.
The two countries also appear to be seeking to accelerate oil and gas projects at a time of heightened demand from energy-importing nations to secure reliable supplies.
Libya push
Earlier this month, MEED revealed that talks were under way at Libya’s National Oil Corporation (NOC) to potentially launch a new licensing round to award some of the unawarded exploration blocks from the 2025 licensing round.
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Algeria drive
Algeria is also advancing projects in the country’s oil and gas sector.
On 8 March, Algeria’s president signed a decree ratifying the development agreement for a $5.4bn oil and gas project in the country’s Illizi South block.
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The total investment of about $5.4bn will be fully financed by Midad Energy, including approximately $288m allocated to the exploration phase.
Amid disruption to global LNG supplies from Qatar, Italy and Spain are currently in talks with Algeria in an effort to secure increased LNG shipments from the North African country.
Algeria’s prime minister has also received requests from Asian countries, including Vietnam, seeking to secure both gas and oil shipments.
It is unclear how much spare capacity Algeria has to supply LNG to new customers, as much of the country’s production is sold in advance under long-term supply agreements.
However, current market conditions are still expected to increase the country’s revenues significantly, as Algiers is likely to be able to command much higher prices in any new agreements.
While the ongoing war is expected to deepen the crisis for many companies operating in the GCC and Iraq oil and gas sector, the opposite could be true for companies established in Libya and Algeria.
Although in recent years these two countries have been viewed as having more challenging business environments than the UAE or Saudi Arabia, companies that have invested in building positions in North Africa’s oil- and gas-exporting states could be well placed to make windfall profits.
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