Oman could not have picked a better time to launch its In-Country Value (ICV) programme for the oil and gas sector.
While national oil company Petroleum Development Oman (PDO) is planning to invest $30bn on new projects over the next decade, the government is looking to maximise the number of skilled Omanis hired by contractors working on its next phase of field developments. It also seeks to double the amount spent on Oman-sourced goods, raw materials and services used to develop its projects to $3bn by 2020.
PDO defines ICV as the total spend retained in country that benefits business development, contributes to human capability development and stimulates productivity in Oman’s economy. The company is in the early stage of developing a Made in Oman index, under which bidding contractors must submit the percentage of Omani workers, goods and services they will use to carry out work on a project.
PDO says it will favour firms that score highly on this index, the idea being that Omanis receive experience and training at international companies, allowing the sultanate to develop a highly skilled workforce.
PDO’s target is to double the share of skilled Omanis employed by facilities and project delivery contractors from 15 per cent in early 2012 to 30 per cent by the third quarter of 2013. But the company itself admits there is a lack of skilled nationals to replace foreign workers and insufficient focus from contractors to achieve this in the past. There is also a long way to go before PDO can meet its target for goods and services.
Contractors must use a sufficient number of Omani workers, goods and services to meet PDO’s ICV requirements without sacrificing the quality brought in by international competitors. It is essential that PDO provides clear and stringent ICV guidelines to bidding contractors if it wants to maintain its current standards.