Since the 1970s, PDO has been hiring, training, supporting and investing in Oman but its ICV strategy became firmly embedded in the Company’s business philosophy in 2011 with the following key aims:

1. Omanisation of skilled contractor personnel

2. Increasing the procurement of Omani goods and services

3. Local vendor development​​

PDO has pioneered new common oil and gas industry standards for ICV requirements in contracting and procurement, aiming to:

• Maximise employment of Omanis and placements on vocational/professional training, making these opportunities attractive to Omani graduates and technical school leavers (Oman and overseas)
• Maximise expenditure on goods and services by Omanis in Oman
• Maximise and develop locally produced materials, products and equipment that (i) maximise value-add in Oman, (ii) introduce new technologies, and (iii) grow Oman’s export industries
• Develop world class domestic capability in vocational/professional education and training institutions, matched to ‘real’ industry opportunities
• (Within tender evaluation) Reward contractors who commit to Oman, in both short-term (contract execution) and in the longer term.

In 2015, PDO awarded contracts worth US$3.7 billion to locally registered firms. The Company has broadened its support of domestic businesses through a variety of initiatives, including technical assistance, ring-fencing the supply of locally manufactured/provided goods and services, the establishment of Omani repair facilities, in-country engineering services and a variety of new in-country manufacturing facilities. Internally, PDO has also launched a network of 15 focal points to help embed ICV across the business. Team members are the first point of contact for ICV advice in their directorates, lead ICV evaluations in tendering and promote ICV achievements across the Company.

PDO is leading the way on offering business opportunities to Omani companies.

A major ICV blueprint strategy for the entire Omani oil and gas industry was unveiled on 18 December 2013 with the aim of unlocking a US$ 64 billion windfall for the Sultanate’s economy and creating 50,000 Omani jobs in the sector by 2020. A total of 53 business opportunities in the industry were identified at a special conference at the Al Bustan Palace Hotel in Muscat which are being unveiled in waves to the Omani business community.

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PDO’s local business development mission is to improve the capacity and capability of the local companies with which we engage, in order to achieve cost reductions, continuous business improvement in PDO’s operations and contribute to Omani economic growth and job creation.

Local business development has been identified as one of the key enablers to support the success of the ICV blueprint strategy overall. This enabler has been embedded in the implementation of opportunities as a strategy solution as well as in related cross-industry initiatives with the following objectives:

• Promote visibility and business across the supply chain
• Provide support for the development of local companies
• Enhance the creation of SMEs and spin-off companies
• Enhance attraction of international suppliers, and
• Establish long-term relationships.

The following objectives summarise the intended benefits of the Vendor Development programme:

• Support local businesses meet minimum oil and gas standards (fit for tender)
• Support local businesses while executing the scope
• Support local businesses diversify offerings through R&D and innovation (products and services)
• Support local business growth – access to new markets
• Support local businesses to obtain related certifications or accreditation
• Support local businesses’ pre-qualification and inclusion in the Joint Supplier Registration System (JSRS).

General note on local business development practices:

• There is no single, universally applicable approach to local business development; each situation needs to be assessed on its own merits
• Local business development projects should be capable of being assessed in terms of quantifiable business benefits
• Local business development is a two-way or three-way activity in that it should be thought of as a joint activity performed by buyer /contractor/vendor.

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PDO is a leading supporter of the Joint Supplier Registration System (JSRS), an ICV initiative of the Oman oil and gas Industry, which has been spearheaded by the Ministry of Oil and Gas in association with the Sultanate’s major operator companies.

The JSRS system addresses the core needs of operators by bringing onboard all the approved suppliers who pass the industry’s validation process and provide for a continuous connectivity between operators and suppliers for ongoing procurement opportunities. This initiative went live on 30 June 2014.

The main benefits of JSRS are that it provides:

• A single online supplier registration system
• A way to pursue easy-to-implement opportunities in repair and fabrication
• A database of oil and gas operators in Oman
• Transparency for business opportunities
• Exposure of Omani companies to international markets
• Increased competencies for customers
• A trigger for CVC certification from OPAL.

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PDO has become the first operator in Oman to develop and implement an ICV data collection system.

The main purpose of the system is monitoring successfully awarded contractors an ICV performance based on the plan and ensuring targets are met. The system is web-based which makes it easy to access for contractors at any point of time and is designed with a unique format to capture all seven ICV elements and the reporting of ICV performance.

The system went live on 24 September 2014 and the main benefits it provides are:

• A single tracking system on ICV data
• An analysis of localisation values on contracts
• A measurement of a supplier’s performance
• A reduction in the time/effort needed to collect ICV data
• A way to minimise data consolidation errors
• Automated workflow & approval.

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We have been careful to ensure local communities benefit from our activities and in 1998 launched the Local Community Contractor (LCC) initiative to give people living in our concession area opportunities to establish their own companies that could provide services to PDO and bid for supply contracts. We have reserved an LCC scope in main contracts and offered guidance and support. There are now specialised LCCs in areas such as maintenance, logistics, electronics, civil engineering, manpower supply and well services, with more than 3,000 Omanis currently working for them.

This story has moved into an exciting new phase and we have also established four Super Local Community Contractors (SLCCs) – larger scale operations generating new employment avenues and entrepreneurship opportunities for thousands more Omanis. The SLCCs are businesses, working on hoists, well interventions and flow line replacement, which collectively have around 9,300 shareholders, all from within the PDO concession area. The SLCCs employ more than 700 staff and have been awarded contracts worth US$640 million. Recent share subscriptions have pushed their combined capital value beyond RO 23 million.

PDO has established a dedicated team helping SLCCs identify and develop business opportunities. This includes specially ring-fenced work in contracts assigned to each of the four SLCCs covering PDO’s core business. In addition to the allocation of these contracts, PDO has provided dedicated support to the SLCCs, including:

• Appointing a business consultant to help them establish corporate governance through selecting and training Board members and key executives.
• Developing business plans, setting up HSE and management systems to industry standards and providing dedicated technical support in whatever work scope the SLCC is executing.
• Seconding PDO’s experienced staff members to each of the four companies so that they better understand oil and gas operations.
• Training Omanis living in the concession area so that they are suitably skilled for employment by SLCCs.
• Allocating industrial plots and workshops at PDO-owned locations.
• Purchasing necessary equipment to execute the assigned work.

Overall, the four SLCCs are progressing very well, focusing on business growth efficiency and ramping up Omanisation. From the outset, the SLCCs have given utmost priority to recruit, develop and retain an Omani workforce especially from the concession area.

A fifth SLCC Al Khazain Oilfield Company has recently been established in Al Wusta Governorate (in the middle of the PDO concession area). This has 1,189 shareholders and capital ofRO 4 million. It’s core activity scope will be provided by another operator, while PDO will provide the supplementary scope. ​​