The Oil and Gas Industry

I n - C o u nt r y Va l u e D e ve l o p m e nt
B l u e p r i nt S t rate g y
2013 2020
Sultanate of Oman
Presented by:

Irshad Al Lawati
CEO of Oman Society for Petroleum Services OPAL
Secretary of the ICV Committee

OPAL The Oman Society for Petroleum Services

The Oil & Gas sectors own vehicle for collective effort on the path of excellence
Omans first and only oil and gas society, licensed by the Ministry of Social Development in 2001
A non-profit organization, operating with members mandate and contributions
Over 375 members registered, comprising operators/producers, direct & indirect service
providers, contractors across a wide range of industries providing services to the Oil & Gas sector
in Oman

Promotes standards and best business practices among the member companies
Facilitates training and employment of Omanis under its Training for Employment program
Provides wide ranges of members services, including certification, networking, conferences /
workshops, and more
Key partner in Omans ICV in O&G sector since its inception
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Who we are Our commitment to ICV development

Within the oil and gas industry, ICV development is addressed by a committee of high level
representatives
- Oil and gas industry representatives in the ICV Committee -

Our storyline today

A journey progressing with solid results and milestones, and more clarity on the way
forward
The purpose of this presentation is to share:
ICV Success to date
The additional ICV opportunity identified
The way to address this ICV opportunity

How the ICV progress and success will be measured

ICV Success to date

The oil and gas companies managed to increase significantly their ICV contribution
over past years
- Key initiatives - Key results Collaboration across the oil and gas value
63%
chain

ICV managers and teams

Train to employ and local workforce
development programmes

Local sourcing increase mainly through

tendering and suppliers development
programmes

Average Omanisation level in 2012

within the oil and gas companies

More than 80%

of the oil and gas companies direct
sourcing is done through local
contractors, agents and suppliers

We need to track the value we generate, down the value chain!

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Time for tighter collaboration and deeper analysis

The ICV Committee believes that the oil and gas industry and the supply market are ready
for further ICV development
Tightening collaboration
of the oil and gas industry... and beyond
Converging oil and gas industry ICV agenda
towards a common programme
Coordinate efforts and initiatives
maximize the return on value creation

to

Leverage expertise and capacity of ICV

Committee members for efficient ICV
development

Deepening ICV analysis

Quantify oil and gas industry demand in
Oman to assess feasibility of new sustainable
ICV development opportunities
Measure the local supply market current
capability and capacity to provide the
required goods and services

Address activities and businesses throughout

the overall value chain
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Focussed ICV Team's effort

The ICV governance is set to guarantee the collaborative approach and the focus on the
strategic streams
- Oil and gas ICV Governance Chairman
H.E
Undersecretary of MOG
OPAL CEO
Secretary
Operators &
Producers

Government
Ministries

MOG
D.G. Planning
& Studies

Government Ministries:
Ministry of Oil and Gas
Ministry of Finance
Ministry of Manpower
Ministry of Commerce and
Industry
Oil & Gas
Contracting
Community

Sub-committees
HR Managers
Sub-Committee

Contracts and Procurement Managers

Sub-Committee

Other
(Vendor Development Program,
Support, Studies, Forums, etc)
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A detailed demand and supply gap analysis

The ICV Committee carried out a comprehensive study to assess the current gaps
and constraints

Goods and services

Workforce

Demand
consolidation

Supply
assessment

Gap
measurement

Consolidated
demand
forecast

Current
Capacity and
Capability

Gaps in the
local supply
market

Required
Workforce

Current size
and
distribution

Gaps in oil and

gas industry
workforce

Which
represents...

Scope of the analysis: 2013-2020 industry (upstream, midstream and downstream) demand forecast
in OPEX and CAPEX in goods, services and skills
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A gap of USD64 billion is the gross value pool to be tapped

The study indicates that USD64 billion could be addressed over the period 2013-2020, which
forms an opportunity to increase ICV down the value chain...
... a value of:

USD51.5 bln
To be addressed
through local sourcing

USD12.5 bln
To be addressed
through employment
of Omanis

USD64 bln
total value to be
addressed

Additional value to be
addressed related to
the oil and gas
companies supply
chain activities

A comprehensive programme to address the USD64 billion

In order to address a maximum value out of the USD64 billion, the ICV Committee has
defined an integrated ICV development programme involving all relevant stakeholders
1
To coordinate the
industry ICV agenda

53 opportunities
to increase local sourcing

To ensure communication
between the oil and gas
companies and the market
... Work in progress

Mission
& Strategy

More than

40 enabling initiatives

Cross-Industry
Development Initiatives
Supply Chain Local workforce
development development
opportunities program

Project Management
Office

ICV Performance
Model

to enhance the ICV

environment

Up to

36,020 trainings
to develop a world-class
local workforce

To monitor and
report ICV
performance
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An oil and gas industry ICV mission and strategy

To coordinate oil and gas industry ICV agenda

Our Mission:

Developing a competitive and sustainable

local supply market: goods, services and skills...
TOGETHER!
Our Strategy:

Leveraging the oil and gas industry collaborative efforts to

progressively and effectively develop the Omani supply
market and enhance the ICV development environment.
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Cross-industry Development Initiatives

To enhance the ICV development environment

Cross-Industry Development Initiatives have been defined covering the six
dimensions defined in the strategy
- Key themes of the Cross-Industry Development Initiatives -

Human Resources
Technology & Innovation
Business Development
Capital & Finance
Contracting & Tendering
Legislation & Process Improvement

...towards a natural process of delivering ICV organic growth...

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53 Supply Chain Development Opportunities

To increase local sourcing across the whole value chain

- Scope of the 53 Supply Chain Development Opportunities -

SMEs
Local Companies
JVs
FDIs
Services
Assembly / Blending
Manufacturing & Fabrication
Maintenance & Repair
New technologies

53
Supply Chain
Development
opportunities

Enhancing quality
Launching new industries
Expanding range of products
and services

All suppliers and contractors

down the value chain:
Direct and
Indirect
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53 Supply Chain Development Opportunities

To increase local sourcing across the whole value chain

- Implementation process of the Supply Chain Development Opportunities 5 - Implement
project

4 - Apply sourcing
strategy based on
an industry
framework

1 - Register interested parties

A 3 to 6 months
cycle depending on
the opportunity
2 - Initiate dialogue

3 - Explore maximization of ICV

Keeping the momentum going...

The remaining opportunities will be launched in separate waves
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53 Supply Chain Development Opportunities

To increase local sourcing across the whole value chain

- List of 15 Supply Chain Development Opportunities presented on December 18th Development Opportunities presented on December 18 th

Presented on behalf
of the industry by

Value to be addressed (1)

PDO and BP
PDO and Oxy
PDO
Oman Gas Co.
Orpic and Oman LNG
PDO
PDO
BP
PDO and Oman Gas Co.
PDO and Oxy
Oman LNG
PDO and Orpic
Orpic
PDO
Oxy

USD1.4 1.5 Bln

USD37 45 Mln
USD40 55 Mln
USD250 300 Mln
USD379 421 Mln
USD23 27 Mln (2)
USD35 40 Mln
USD474 535 Mln
USD2.8 to 3.1 Bln (3)
USD350 389 Mln
SME development
USD194 216 Mln
USD25 30 Mln
USD430 478 Mln
SME development

Development of drilling rigs

Fabrication and threading of tubulars
Manufacturing of casing equipment and casing spares
Development coating facilities for pipelines
Purchasing of commodity chemicals
Water production from brackish water for drilling activities
Manufacturing of cables accessories
Manufacturing of low and medium proppants
Manufacturing of Carbon Steel pipes with large and small diameter
Manufacturing of valves
SME development in HSE advisory
Scaffolding and manufacturing of scaffold parts
Tank maintenance and cleaning
Promoting switchboard manufacturing capability and product portfolio
SME Development Programme focus on Inspection Services

The supply market is welcome to approach the PMO for more information
about the remaining opportunities listed in the catalogue
Note(s): (1) Value of importations and expatriates compensation generated by the oil and gas industry supply chain activities over the period 2013-2020
(2) Only PDO demand // (3) total demand of Carbon Steel pipes

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The current distribution of the oil and gas workforce

22,369 Omanis working in the oil and gas in 2012

The study shows that the current Omanisation levels are diverse depending on the
sector and the skill level
- Number of Omanis and Omanisation level per sector (1) Construction

4,050

12,160
25%

Service providers

Oil and gas companies

Manufacturing

9,494

5,630

59%

6,497

3,361
63%

To be assessed in next wave

- Number of Omanis and Omanisation level per skill level (1) Semi-Skilled

2,424

27%

Engineer

2,271

39%

Technician

3,097

Operator

3,166

Supervisor
Managerial
Inspector

xxx

Number of Omanis in 2012

xxx

Number of expatriates in 2012

xx%

Level of Omanisation in 2012

Note(s): (1) based on 2012 job distribution

Unskilled

936

58%
76%

1,988

6,488
3,606
2,219
987

32%

915 261 78%

186
918 17%
4,456

46%

5,131

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The workforce we need

72,704 jobs by 2020 in the oil and gas industry

The ICV blueprint strategy study assessed the future workforce requirements of
the oil and gas industry
- Demand for jobs in the oil and gas industry (1) -

Number of job Positions

80000
70000

4,738

60000

24,868

50000
Total Demand
by 2020: 72,704

40000
30000

32,094

20000
10000

11,004

0
2013

2014

Oil and gas

Operators
companies

2015

2016

Construction Sector

2017

2018

Service Providers

2019

2020

Manufacturing

Note(s): (1) based on the 5-year demand analysis, extrapolated to 2020, data as of April 2012 | (2) including jobs currently filled by expatriates
and the new jobs created by the future increase of the demand

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Our strategy

A strategy to set our workforce development priorities

In response to the current context and the future workforce requirements, the HR
Sub-Committee defined a local workforce development strategy

Increase the competency level and productivity of local workforce

building intellectual capital to drive performance in
technical and medium to high-end professions by
setting up training programs for short-term development and

Up to

36,020 jobs
to be prioritized

improving education for long-term development to

internationally accredited standards.

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A Local Workforce Development Programme

To develop a world class, local workforce

The defined local workforce development journey involves contribution of all
relevant stakeholders
Set priorities and phases

Align key Stakeholders

5 - Award
contracts

4 - Define and
implement action plan
to close the gaps

Develop Employee Value

Proposition to attract into
the required jobs

1 - Refresh
demand data
Process for
each priority
skill
3 to 6 months

3 - Assess education and

training bodies
(capacity and capability)

2 - Define industrial
skills standards

Develop the Oman oil and

gas industry competence
framework
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An ICV performance model

To monitor and report ICV performance

ICV creation will be monitored to measure our performance and update our
ICV strategy and priorities
ICV Standard Terms and Conditions
ICV Standard Evaluation Model
ICV Standard Monitoring and Reporting
ICV Cost and Benefit Economic Model
Delivering Training program on the above
ICV standards to certain operators employees
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ICV Success means...

We know that we succeeded when we will achieve our mission

Omani supply market

Competitive
Omani oil and gas supply
chain

Meeting our
local demand
and exporting

World-class
Omani
workforce
turning around our skills
deficit

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Our next key steps

Keeping the momentum going...

Continue engaging key stakeholders and ensure alignment (government bodies and
private sector)

Initiate dialogue with interested parties and implement the ICV opportunities
presented today
Collect proposals of the market through the PMO... beyond the presented
opportunities
Finalise & Communicate PMO role and functioning
Communicate & Launch new waves of ICV opportunities

...our ICV journey continues, with stronger collaboration and partnership...

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Thank you for your contribution!

Our mission:

Developing a competitive and sustainable local supply

market: goods, services and skills... Together!
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