Crackdown a first step to reform

30 January 2014

A corruption investigation into Oman’s oil and gas industry could lead to greater sector transparency

Oman’s oil and gas industry is looking on nervously as the government prepares to try several individuals in court for allegedly taking part in bribes to sway construction contract awards.

The trials follow the mid-January convictions of the managing director and a senior manager of Oman’s biggest construction group Galfar Engineering & Contracting and the head of the tender board for the country’s biggest oil company Petroleum Development Oman.

The forthcoming trials involve executives from some of the sultanate’s major oil and gas companies and local subsidiaries of international engineering, procurement and construction firms.

Galfar’s managing director, Indian national Mohammed Ali, was fined RO600,000 ($1.6m) and sentenced to three years in prison, followed by deportation.

Ali, who stepped down from his position following the conviction, founded Galfar in 1972 and built it up to become the country’s largest construction firm. The company is synonymous with the enormous advancement of Omani infrastructure under the reign of Sultan Qaboos bin Said al-Said.

The fact that the government’s investigations have led to the downfall of such a wealthy and influential figure is evidence that Oman is getting serious about preventing corruption in the oil and gas industry.

The cases under investigation involve some of the largest downstream and logistics projects under development.

It is unclear why the government has chosen this time to root out corruption in its oil and gas sector. More high-profile convictions in the forthcoming trials would suggest that bribery is an endemic problem in Oman’s tendering process and could lead to calls for a reform of the process to increase the transparency of contract awards.

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