Projected 2020 demand for employees from exploration and production companies in OmanMore than 10,000
Omani oil and gas lessonsAugust 28, 2015
OPAL’s acting CEO, Musallam Al Mandhari, talks to TOGY about government initiatives that assist communities affected by oil and gas operations, as well as the challenges faced by companies attempting to increase local content. The role of Oman Society for Petroleum Services (OPAL) is to help members share best practices.
What role are in-country value initiatives playing in Oman’s oil and gas industry?
In-country value initiatives were implemented to generate jobs and ensure a sustainable increase of domestic spending on projects.
The Ministry of Oil and Gas created a pathway so that in-country value will be taken seriously by operators, producers and contractors, which are expected to provide contracts to local services companies and create opportunities to develop local manufacturing expertise. Companies in the upstream sector are working to identify areas that can be further localised.
What can companies do differently to meet the required Omanisation rate?
Greater collaboration is needed between OPAL and the Ministry of Manpower to identify which positions can be Omanised in the oil and gas industry. Vocational training courses can then be developed to train and churn out Omani workers for positions that are in demand.
Some international firms such as Shell Development Oman contribute large funds as part of their corporate social responsibility to train Omanis. A compulsory training levy based on profits would be a better option to ensure a sustainable availability of funds as well as to intensify the training of the local workforce.
To what extent is PDO’s scheme to create super local community contractors (SLCCs) an answer to developing Omani companies?
The concept of SLCCs is only one of the policies the government supported to assist local communities living in concession areas. This initiative has functioned very well and we are beginning to see the benefits. It has provided jobs for citizens living near oil and gasfields.
The government is contributing to the development of small and medium-sized enterprises by providing startups with loans via the Al Rafd Fund at preferable rates. Some regulations will be forthcoming to make available at least 10 percent of contract value in government tenders for such businesses.
Will low crude prices slow down projects?
Low oil prices are not a new phenomenon, particularly in the Middle East. Based on past cycles of price fluctuation, this is just another wave that oil and gas companies and the government will have to ride out.
Projects that have yet to begin might be postponed, and ongoing ones will either be put on hold or reduced in scope. Companies in the oil and gas industry are already familiar with the challenges that are brought on by low oil prices. Some projections during the 1980s and 1990s, an era of low crude oil prices, suggested that crude would be as low as $10 per barrel. The price of oil has stabilised far above that level and should rise gradually.
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