Lockheed Sees More Clarity On Saudi Naval Buy In Next Months

By Andrea Shalal-Esa/Reuters
November 21, 2013

Lockheed Martin Corp (LMT.N) expects news about a multibillion dollar program to modernize the Saudi Arabian Navy in the next several months, senior company executives told Reuters at the Dubai Airshow on Wednesday after meetings with Saudi officials.

“We’re hopeful in the next several months that some clarity will present itself on how they want to go forward on what hull, what design, and what mission equipment,” said Patrick Dewar, executive vice president of Lockheed Martin International.

Lockheed Chief Executive Marillyn Hewson discussed the naval modernization program and other issues during the air show with Prince Salman bin Sultan, the Saudi deputy defense minister, who was appointed in August, Dewar said.

“We understand the new Saudi deputy defense minister is doing his own assessment on how they should go forward,” Dewar said. “We’ve had good meetings with them here at the show as well as in the (Saudi) kingdom over the last couple of months.”

U.S. executives and government delegates said they had not seen any signs of a chill in U.S. ties to Saudi military officials after Saudi intelligence chief Prince Bandar bin Sultan last month said the kingdom was hoping to make a major shift away from the United States.

Saudi Arabia is continuing to evaluate a range of options for the naval modernization program, including purchases of up to 12 of Lockheed’s steel monohull Littoral Combat Ship (LCS) or the larger DDG-51 destroyer built by General Dynamics Corp (GD.N), executives said.

General Dynamics declined comment.

The number of ships would depend on whether Saudi Arabia opted for the smaller or larger of the hull forms, they said.

The Saudi Naval Expansion Program II, or SNEP program, has been under discussion for years, but U.S. industry and government officials say the effort has picked up some fresh momentum in recent months. Earlier estimates had put the value of the program at around $20 billion.


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