Establishing a base

Oman

Hazem Helal, general manager of Petrojet Oman, talks to TOGY about their competitive advantage in oil and gas engineering, procurement and construction (EPC) projects in Oman, as well as the company’s plans for diversification. Petrojet is an EPC company that first worked for Petroleum Development Oman (PDO) on a pipeline project in 2007. In 2013, Petrojet established a local company and started working on several projects with Omani national operators.

What have been your recent activities in Oman?
We have multiple projects in progress. With Petroleum Development Oman (PDO), we have the Kauthar condensate pipelines project, consisting of two parallel 105 km long condensate pipelines, and another GGP and Fahud West pipelines project that started four months ago. This project involves two 30-inch and 12-inch pipelines, 56 km and 45 km long, respectively. In addition, we have a project with Oman Gas Company (OGC) for the Salalah Gas Loop Line, an 85-km, 30-inch pipeline.
As a locally established company, we pursue projects with all operators in Oman. For example, we are a front runner on the strategic Duqm pipeline EPC project, which we believe we are perfectly aligned to execute effectively.
To extend our activities, we have an agreement to lease 50,000 square metres in the Duqm area to establish a permanent industrial workshop that will deliver most of the equipment required in the oil and gas industry to the national operators. Now we are in the phase of completing the design and getting the permits. We hope to start construction in Q4 2016.

What was behind your decision to re-enter the market and start bidding on new tenders and set up a company here?
In 2008, we bid for the majority of projects as an international company which has limited access to real business opportunities in Oman. On the other hand, we commenced our operations in 2013 in partnership with one of the nationally recognized Omani Companies. That assisted us in paving our way toward establishing a base in Oman and achieving tangible success in a relatively short time.

Do you have plans to diversify into other areas of the industry?
Yes, we have an aggressive plan to diversify into high profile building and infrastructure projects.
We are recognized in Oman for oil and gas projects, but this is not our only core business. We also execute large scale civil and infrastructure projects, and we are focusing on penetrating these markets in Oman.
The most important point is feasibility. If you are going to expand your services in a specific market, you need to make sure that this move is feasible for the company and adds value to the market. Oman is famous for being a highly competitive market. Most of the big companies working in Oman are also expanding into the construction business.
For oil and gas projects, we are proud that we managed to prove ourselves in an important market like Oman. Now, we are carefully analysing our options to identify real value we can add to the construction market.

What do you think it was with these pipeline projects that made you stand out as the strongest option for them?
Pipeline construction is our comfort zone. We have some of the most talented and experienced pipeline construction crews and pipeline construction equipment across MENA. Our experience exceeds 25,000 km of pipelines with diameters up to 66 inches, mostly executed in climate extremes and very challenging topographies.
Our achievements in pipeline construction in Egypt and MENA have earned us our place atop the podium for years.

Have you had any challenges with in-country value and Omanisation targets?
It is our policy to maximize local content in communities where we work in. Caring for society is a fundamental part of our global program, “We Care.”
We can easily achieve the in-country value (ICV) targets. However, we are always facing challenges in acquiring the right candidates in the right positions. We have achieved considerable progress in training Omani personnel in technical skills. I trust this will significantly improve as we start operating our permanent workshop in Duqm next year.
Currently, we have very qualified Omani colleagues working with us, and we are totally supporting the government plan for Omanisation. We recently started hiring and training Omani technicians. We are focusing on multiple disciplines, not just positions in admin, drivers or the like.

What is the Omanisation rate in the company?
More than 35%. But we are always trying to increase this percentage.
Our “We Care” program, is not only about hiring Omanis, but also about how we can develop the third-party Omani subcontractors we have been co-operating with on all of our projects.
The workshops are something in which we are going to invest within the next two years in order to operate at full capacity. We think that our Omanisation ratio will then be maximised because achieving the Omanisation ratio in manufacturing disciplines is much easier than in construction disciplines.

How do you think the deep-sea pipeline that is being constructed to bring Iranian gas to Sohar will affect the market?
This pipeline will have a significant role in providing Oman with the gas for its domestic needs and its industry requirements, but we should not overlook the development that BP is doing in the Khazzan field to satisfy the same goal. In addition, there are PDO initiatives in the north to maximize Oman gas production.

What is the value of the partnerships that you have managed to build up since you have been here?
We have relationships with many local Omani companies through subcontractors or joint ventures. We also have strong relationships with all the market players here in Oman and are continuing to build on those relationships in larger projects.
If there is a large project that exceeds our capabilities, then strong collaboration between more than one company is beneficial. We are also building our relationships with SMEs. There are multiple competent and rising SMEs in Oman.

What are your key objectives in the next 12 months in Oman?
We are focusing on mega-projects within the Duqm area and its infrastructure development projects. We are interested in all of the oil and gas projects that are in the pipeline, even the ones that are still just an idea, as we need to guarantee sustainability. As such, we are focusing on multiple national companies since they have a great potential that we cannot ignore.
Our plan for this year is to maximize our market share in Oman. We have doubled our projects’ volume since we established our local company. We are aiming to penetrate new disciplines in the market, maximize our Omani work force and deliver unprecedented quality to our clients.
Our competency is in large-scale projects, which is what we are always focussing on. Currently we have a good list of projects we are participating in, even larger projects than what we are already doing through consortiums, joint ventures, or by ourselves. We believe we can do more than what we are doing right now.

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