Saudi Arabia is exploring opportunities to expand its energy diversification strategy by developing a domestic lithium industry, utilizing lithium extracted from oilfield water to produce battery-grade materials, according to Sherif Foda, chairman and CEO of National Energy Services Reunited (NESR). Speaking at the 25th World Petroleum Congress Energy Congress in Riyadh, Foda highlighted lithium's crucial role in batteries for electric vehicles, consumer electronics, and renewable energy storage, positioning the metal as a key element in the Kingdom’s industrial future.
Foda emphasized that Saudi Arabia’s abundant energy resources, including oil, gas, minerals, and rare earth elements, provide a foundation to establish new industries and localize supply chains. He noted that recent findings of lithium-rich water in oilfields create prospects for the country to produce battery-grade lithium carbonate, meeting both domestic needs and international demand.
The announcement comes shortly after NESR and Saudi Aramco signed an agreement on October 8 to develop a lithium demonstration project featuring direct lithium extraction technology. Valued at approximately $200 million over a period of up to five years, the project aims to produce around 2,000 tonnes of battery-grade lithium carbonate annually, with production scheduled to start in late 2027.
According to Foda, the strategic focus is not only on extracting lithium but also on localizing the entire value chain by importing technology and expertise and adapting it within the Kingdom. This approach is intended to enhance self-sufficiency, strengthen domestic manufacturing capabilities, and reduce dependence on international supply chains. He stressed that local sourcing of 70 to 80 percent of products—so long as it remains commercially viable—would improve the country’s industrial resilience, particularly during periods of global or regional disruption.
Foda pointed to Saudi Aramco’s In-Kingdom Total Value Add program as a model for sustainable industrial localization. He highlighted the importance of economic viability in attracting manufacturers to operate within Saudi Arabia, citing examples such as industrial sand and chemical processing where local adaptation has proven successful. According to Foda, a sound balance between local production and selective importation of highly specialized materials is essential for robust industrial development.
Looking ahead to 2030, expanding commercially viable domestic production remains a priority, while continuing to integrate international technological advances as needed. Foda underscored a pragmatic approach, focusing on maximizing the share of products that can be manufactured locally based on feasibility and market demand to enhance the Kingdom’s economic diversification and industrial sustainability.