Petrofac’s strategic approach in Oman_Khalid-AL-JAHWARI

We believe that green hydrogen and ammonia projects have potential, and we are investing in knowledge and technology to contribute to their success.

Khalid AL JAHWARI Oman Country Manager PETROFAC

Petrofac’s strategic approach in Oman

May 11, 2023

Khalid Al Jahwari, Petrofac’s Oman country manager, talks to The Energy Year about the company’s strategic approach to offering technology to clients and the energy transition, as well as its role in supporting Oman’s development, local skills evolution and In-Country Value (ICV) programme. Petrofac supports Oman’s energy industries in designing, building, operating and maintaining key facilities.

How would you describe Petrofac’s legacy and impact in Oman?
Petrofac has been operating in Oman for 40 years, and during that time, we have made a significant contribution to the country’s energy sector and economy. We have supported the development of Oman’s energy infrastructure through the delivery of major EPC projects like Rabab Harweel and the Sohar Refinery. These projects have helped to boost Oman’s energy production and supply, creating job opportunities, and contributing to the growth of the local economy.
Petrofac’s legacy and impact in Oman are characterised by a strong commitment to Omanisation, ICV, local workforce development, and social responsibility. We look forward to continuing to support the country’s growth and development in the years to come.

Can you give us a breakdown of your current projects?
We have extended our services within the petrochemicals sector and we have two major ongoing projects. One is the OQ8 Duqm Refinery, which consists of four EPC packages; we executed the second package. One of the largest refining and petrochemicals projects, it is expected to come into full production by the end of 2023 and once operational will serve demand growth in the region and globally. The second project is PDO’s Marmul Gas Compression Plant, which is already in the construction phase and will be delivered before the end of 2023. The new facility will eliminate permanent flaring and manage associated gas.
In October 2022 we were also awarded a five-year EPCM service contract for Shell’s Block 10 Mabrouk Phase II project. We are responsible for the engineering and procurement, while another contractor is handling the construction. The Mabrouk field started gas production in January 2023 and the daily output is expected to reach 500 mcf [14.2 mcm] per day by mid-2024.

What is Petrofac’s approach in Oman when it comes to selecting the technology offered to its clients to implement their projects?
We remain technology neutral, allowing us to select the best-in-class technology to support our clients’ ambitions, develop a track record and keep ourselves well positioned for future opportunities.
We do not limit ourselves to one option and are able to offer the best technological solutions. We have the ability to compare and select from available products to meet the clients’ project scopes and requirements. We have established relationships and connections with different technology providers to cover client needs on a global and local supply chain level.

How well positioned is Petrofac Oman to deal with the challenges that the green energy transition entails?
At Petrofac Oman, we recognise the importance of the green energy transition and the challenges it brings. While some infrastructure and technology used in the oil and gas industry are suitable for green energy scopes, specific products like electrolysers require different supply capabilities. We are currently in discussions with important green energy developers such as ACME Renewable Energy, InterContinental Energy, DEME, and Air Products to offer our services and support their initiatives. We believe that green hydrogen and ammonia projects have potential, and we are investing in knowledge and technology to contribute to their success.


What are the main opportunities that you see arising from the downstream developments planned and ongoing in the country?
One of the most significant downstream projects on the horizon, in addition to the OQ8 refinery, is the expansion of Duqm Refinery. In December last year, a project development agreement was signed for a jointly owned petrochemicals complex in the SEZD [Special Economic Zone at Duqm] between Saudi Arabia’s SABIC, OQ and Kuwait Petroleum International.
Additionally, the government is implementing strategic storage fuel tank projects throughout the country, not only at OTTCO’s Ras Markaz terminal in Duqm, but also at its terminal in Salalah.

How do you assess the increasing commitment oil and gas players are making to sustainability and Petrofac’s endeavours to support them in Oman?
The commitment of energy players to sustainability is encouraging and reflects the industry’s growing awareness around the environmental impact of its operations. The increased focus on sustainability is important not only for reducing greenhouse gas emissions and mitigating climate change but also for improving the reputation of the industry.
Petrofac’s efforts to support sustainability in Oman include initiatives such as reducing energy consumption, waste management and promoting environmental awareness among our employees, sub-contractors and the wider community. We implement sustainable solutions and practices in our operations to reduce flaring and emissions and are contributing to the overall goal of reducing the environmental impact of the energy industry. Additionally, we have worked on implementing renewable energy solutions, such as solar power, to reduce our carbon footprint.
We are committed to sustainability and social responsibility in Oman and have supported several community initiatives – including education, health, and environmental programmes – to create a positive impact on the communities where we operate.

What do you view as the main challenges preventing EPC projects from being finalised and operational quicker?
I am looking with optimism at the EPC market and trends for 2023 and beyond. However, the final decisions are expected to be slower. Unlike previous years, when decisions were based purely on commercial evaluation, today the process is going through a further screening and being subject to more criteria, such as carbon based and GHG emissions reduction.
In other words, clients need to ensure the sustainability of a project, comply with all the necessary requirements for a lower carbon footprint, and to propose the right technology to be used.
Project financing is one of the most significant challenges, particularly for large projects that require significant upfront investment. Securing financing can take time and may require collaboration with multiple financial institutions. With previous experience I hope the approval process for new projects will be much faster.

Several large local EPC companies are considering jumping into the design-build-own-operate-maintain (DBOOM) scheme and other delivery models. What is Petrofac’s standpoint on its own business model?
We are set up to deliver for our clients and our business delivery model is structured around our lump-sum EPC business and our operations and projects business, as well as our growing New Energies focus. Petrofac has a significant track record delivering onshore and offshore engineering, procurement, construction, installation and commissioning projects. Lump-sum turnkey is our predominant commercial model, but we also offer our clients the flexibility of other models, such as services on a reimbursable basis, through our engineering, procurement and construction management (EPCM) business model.
On the operations front, our Asset Solutions business manages and maintains client operational activities and services across the asset lifecycle, both onshore and offshore. Our teams also deliver small- to medium-scale EPC projects and provide concept, feasibility and front-end engineering design (FEED) services, mostly on a reimbursable basis.

What role is Petrofac playing in fostering Oman’s development, local skills evolution and ICV programme?
Petrofac actively contributes to Oman’s development and has played a major role in the country’s progress and growth. Over the past 30 years, we have contributed towards in-country value creation, the supply chain and national workforce development. We have generated USD 3.7 billion of in-country value and achieved 48% Omanisation. We continue to partner, support and nurture potential in every relationship.
Our commitment to ICV initiatives goes beyond Oman, as we have started exporting Omani materials to other countries. For example, we are using Oman Cables as a supplier to export cables to a project in Algeria. By creating opportunities for local manufacturers to provide their services and products in Omani projects and giving them the possibility to export in the region, we enable them to grow their business, hire more Omanis, and generate more value for the economy.
We are also invested in the future of the energy industry and provide training specific to the New Energy sector such as hydrogen and ammonia production, and the challenges of green hydrogen development. In December 2022, we enabled 25 Omani graduates from different universities to complete courses on these topics at the Takatuf Petrofac Oman training centre for technical excellence.

Where do you see Petrofac Oman in three years’ time?
We have a strong and positive outlook for Petrofac Oman. We will continue to build on our legacy of delivering successful projects and contributing to Oman’s development. We are confident in our ability to adapt and thrive in an ever-changing energy landscape to continue being an important operating centre for the company.

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