1998 Press Releases-07

Yokogawa Electric Corporation (Main office: 2-9-32 Naka-cho, Musashino city, Tokyo, Japan; president: Eiji Mikawa; capital: 32,306 million yen) has recently acquired two major job orders from the Saudi Arabian Oil Company (also known as Saudi Aramco), the national petroleum enterprise of Saudi Arabia Saudi Aramco and one of the largest oil companies in the world.

Summary of Orders

Yokogawa Electric Corporation has successfully acquired two major job orders at the one time from Saudi Aramco, one of the largest oil companies in the world.

One order is for a project of modernization of Saudi Aramco's Riyadh refinery. The Riyadh refinery is located 30km south-east of the capital Riyadh and has a production scale of about 140,000 barrels per day. The Riyadh refinery began operation way back in 1975 and is therefore required to renew its control system. This time, Saudi Aramco has decided to employ Yokogawa's Integrated Production Control System (DCS) in an effort to update their control system and increase its capabilities. This purchase order was a result of Saudi Aramco's contract with McConnell Dowell Constructors Ltd. of Australia and Petrocon Systems, Inc. of the United States, which will jointly undertake the modernization project.

The control system set up with Yokogawa's DCS "CENTUM CS" is a large-scale system that includes about 40 operator stations and 25 field control stations. Since the turnkey contractor is a consortium of joint plant makers from the United States and Australia, Yokogawa had to make full use of their overseas network to bid for the order. This network included Yokogawa Industrial Automation America, Inc. (YIA) in the United States, Yokogawa Middle East E. C. (YME) in Bahrain, and, of course, Yokogawa's International Sales Division.

The other order is for a project to modernize the control systems at four Southern Area Production facilities, called Gas Oil Separation Plants (GOSPS). Yokogawa Middle East (YME) received an order for Yokogawa's DCS to the amount of about 450 million yen (approx. US$3.4 million). At an option, the contract also includes the renewal of GOSPs in five other places.

Yokogawa's Activities-to-Date and Future Development in the Near and Middle East

Yokogawa first began supplying products of various plant control equipment, including Yokogawa's DCS, to the Near and Middle East region in the early 1970's. These products were exported to Iran, Turkey, and other countries via negotiations with Japanese plant makers. Then, in 1976, before the Iran Japan Petrochemical Company (IJPC) was even established, Yokogawa opened a representative office in Tehran (the capital of Iran) to start real activities in the Middle East. The Middle East representative office later moved to Kuwait (in 1981) and then to Bahrain (in 1990), strengthening and expanding its functions and developing sales and support activities specifically for that region. In 1990, Yokogawa elevated the status of the representative office in Bahrain to that of a local corporation named "Yokogawa Middle East" (YME). The sales, engineering and after-service functions were strengthened so that YME can serve as the base for the whole Near and Middle East region. Yokogawa has also been pursuing business from the main oil and petrochemical companies in countries of the Near and Middle East by setting up a network of branches and agencies in those countries.

Many of the oil and petrochemical plants in the Near and Middle East were erected in the 1970's and will no doubt be due for renewal of their facilities in the near future. As part of the renewal of their facilities, these plants are increasingly demanding the latest production system and one that incorporates a sophisticated production control system and integrated business package system (ERP). Although investment in plants and equipment is sluggish in most countries due to the drop in the price of oil, potential investment in the Near and Middle East is still high compared with that in the stagnated Asian economies. Based on our new business concept "Enterprise Technology Solutions" (ETS) issued last year, Yokogawa is now developing a technology-solution proposal function and a global ETS system. The Near and Middle East region is regarded as one of the most promising markets for developing the ETS business. Yokogawa intends to use their years of experience in this area to date to actively develop business and respond to the new demands and requests of customers.