Interviews
Exceeding Expectations in Value Creation

PDO’s spend with locally registered companies was around 18 per cent in 2013. The target set for us was to raise it to 38 per cent by 2018. I’m proud to say that we have not only met but exceeded the target, by managing to achieve a 41per cent spend with locally registered companies by as early as 2016. It’s also important to note that as much as 53 per cent of our well engineering contracts are awarded to Local Community Contractors (LCCs).
If we look at the markets like Norway and Nigeria that have a long history of ICV, we have managed to do better than them, and also in such a short period of time. However, we can’t sit back and celebrate our impressive achievements in ICV. Now there is an opportunity to ensure the sustainability of our ICV levels and that’s where we are focusing on currently. We are adopting various measures to realise this goal.
To give you an example, we have a large community of contractors vying for our tenders to provide services or equipment to us. That means some win and some miss out. So we are putting together contract strategies where Omani SMEs and contractors are encouraged to collaborate with each other and pool resources as a way of securing business with PDO. By adopting this approach, it makes it easier for contractors to plan for the longer term.
That way everybody wins and it will also help us to provide training-for employment opportunities for Omanis. We don’t want just one or two companies to survive and thrive and the to rest to go out of business. This would be against our stated objectives of creating value for the society and nation. We want a win-win situation for ourselves, the community we serve and the country as a whole.
By and large we have been quite successful in our sustainability endeavors. This year alone, we have signed many agreements where we are actively partnering with vendors and contractors to increase In-Country Value, retaining more of the wealth of our industry in Oman. For example, we recently signed two deals worth US$253.1 million with local manufacturers and partners for the supply of valves and transformers.
We struck deals with Rusayl-based Voltamp Transformers Oman for the supply of power transformers and with Al Jizzi Transformers and Switchgears, located in Ma’abella, for the supply of well head transformers. We also penned agreements with Muscat-based Techno Fit Trading: one with Chinese concern Wuzhou Valve Company for the manufacture of ball valves, and one with Indian firm Gene-tech Controls for the manufacture of mono-flange valves. After the first three years of these deals, both of the foreign companies have agreed to establish production facilities in the Sultanate to make the key components.
In another development, a new PDO backed factory to manufacture key well equipment for the oil and gas industry has opened in Nizwa. The Omani company Gulf Energy SAOC established the Fishing & Remedial Experts Enterprise (FREE) facility. We have signed a 10-year contract with FREE. The factory will retain more than US$8.4 million in country, supplying drilling and fishing tools which were previously bought on the international market.
We also signed three contracts worth US$35 million with Omani firms for the supply and servicing of compressors. We agreed on two contracts with Bin Salim Enterprises LLC for the supply of instrument air compressor packages and the maintenance and repair of installed units. We also penned another service deal with PipeLine Supply Company LLC for an existing compressor fleet.
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