John Murphy

“These challenging times lead oilfield services companies to re-evaluate their pricing approach and become more competitive.”


in figures

Number of rigs supplied for Occidental of Oman4

Annual turnover as share of employees20 percent

Drilling deep in Oman

September 8, 2015

Nabors Drilling Services area manager John Murphy talks to TOGY about his concerns regarding cost-cutting initiatives by upstream companies and the high turnover rate in the oilfield services sector. Nabors is a multinational company that owns and operates the world’s largest land-based drilling rig fleet. Occidental of Oman and Hungary’s MOL are among its clients.

How have depressed oil prices influenced the oil rig count in Oman?
While the rig count in the US has declined rapidly, Oman has been resistant to the low crude prices to a certain degree. Drilling contractors and exploration and production companies have not experienced a dramatic change in rig counts compared with the oil and gas market in the Western hemisphere.
These challenging times lead oilfield services companies to re-evaluate their pricing approach and become more competitive. The upstream sector in Oman is a more streamlined business and cuts unnecessary costs. To minimise expenses, upstream operators have requested discounts from contractors. A high production rate is imperative for Oman’s economy and oil companies in the country are aware that they cannot shut down rigs due to a temporary drop in crude prices.
Nabors has four rigs working for Occidental of Oman and another rig that recently finished its contract with Thailand’s PTTEP Oman. We will also be drilling at MOL’s block 66.

How can services providers help their Omani personnel to find work between contracts?
We were forced to lay off 50 employees due to our contract finishing with PTTEP Oman. We assisted most of these employees in finding employment with other drilling contractors.
Nabors will be hiring an equal number of employees in the third quarter of 2015, when we start our contract with MOL. Companies have to co-operate with the Ministry of Oil and Gas to prevent Omanis from being unemployed. Governmental bodies and services companies work together to ensure that the surplus staff at a specific company find a new job at another company.


To what extent are services providers still forced to import oil and gas equipment?
While a lot of the consumable materials and supplies that are required are available in Oman, high-technology and specialised equipment still needs to be imported.
Both international companies and the domestic enterprises have a set in-country value approach in place. They prefer to purchase from domestic suppliers when possible and co-operate with operators that are enthusiastic about local content development.
Supply chain management is still a challenging task. However, Oman is better than other regional countries in this regard. As a drilling contractor, we have to import some high-tech equipment from around the world.
As the manufacturing sector in Oman continues to expand, the primary advantages of acquiring locally produced goods are that they are usually competitively priced and the customer receives after-sales services.

What are the major challenges to effective human resource management?
Employee turnover in the Omani hydrocarbons industry is substantial and finding experienced skilled workers can be challenging. Despite the fact that Nabors in Oman employs a loyal workforce, the annual turnover rate of the company is close to 20 percent.
This is partly due to the nature of the business, with contracts ending and starting, but it is also because Omani employees can jump from one company to another.
It tends to be the less experienced and lower-skilled portion of the national workforce that leave one company for another, generally for a slightly higher wage or a promise of promotion to a higher position.
Nabors invests heavily in training and fortunately a lot of upskilling can be facilitated locally through training centres or by bringing in skilled instructors for in-country training.

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