Saudi Arabia's Taqnia Aeronautics and Sikorsky, owned by U.S. company Lockheed Martin, have agreed to look at producing Black Hawk helicopters in the kingdom, Sikorsky said on Tuesday.
Faced with weak oil prices, Riyadh has said it wants to diversify its economy, create skilled jobs and boost the private sector, including raising participation in the defense industry.
Lockheed is rapidly expanding its international sales and wants to strengthen its presence in key markets such as Saudi Arabia.
The world's top oil exporter last year abandoned decades of backroom politics to lead allied countries in a war in neighboring Yemen as part of a wider confrontation with rival Iran and is seeking to strengthen its military capabilities.
"The new agreement outlines the investment, technology and skills needed to establish production jobs for Saudi citizens, and could lead to direct involvement in the assembly of Sikorsky S-70 Black Hawk helicopters in the kingdom," Sikorsky said.
Black Hawk helicopters are operated by the kingdom's Defense Ministry, National Guard and Interior Ministry, Sikorsky said. It has also supplied Saudi Arabia with S-92 commercial heavy lift helicopters and Seahawk helicopters under the U.S. government's foreign military sales program, it added.