CP-107 Corporate Management Framework CoP PDO

Petroleum Development Oman L.L.C.
Document Title: Corporate Management Framework
Document ID CP-107
Document Type Code of Practice
Security Restricted – PDO Staff Only
Discipline Corporate
Owner Managing Director
Issue Date June 2014
Revision 8.0
Keywords: This document is the property of Petroleum Development Oman, LLC. Neither the whole nor
any part of this document may be disclosed to others or reproduced, stored in a retrieval system, or
transmitted in any form by any means (electronic, mechanical, reprographic recording or otherwise)
without prior written consent of the owner.
Revision: 8.0
Petroleum Development Oman LLC Effective: June-14
This page was intentionally left blank
Page 2 Corporate Management Framework - Code of Practice Printed 30/06/2014
The controlled version of this CMF Document resides online in Livelink®. Printed copies are UNCONTROLLED.
Revision: 8.0
i. Document Authorisation
Authorised For Issue June 2014
Revision: 8.0
ii. Revision History

The following is a brief summary of the most recent revisions to this document.
Date Issue Reason for change
April 1997 1 First Issue.
December 1999 2 Build on foundations of original document.
Provide clarity on strategy and decisions made.
Capture feedback received from the organisation.
November 2003 3 Actions from CMF Review incorporated.
Re-structured to reflect current strategy and reinforce

mandatory requirements.
January 2004 4 Approved for Issue.
February 2005 5 NOM, EPBM v4 and new Shareholder & Operating Agreement
impacts incorporated.
August 2010 6 Reformatted and Reviewed.
January 2014 7 Reviewed and Updated.
Changes in Corporate Vision, Strategy & Corporate

Orgnisation incorporated.
PDO Control Framework Introduced.
June 2014 8 Reviewed, reformatted and Updated.
Introduction of the In-Country Value Directorate (ICVD).
iii. Related Corporate Management Frame Work (CMF)

Documents
The related CMF Documents can be retrieved from the Corporate Business Control
Documentation Register CMF.
Revision: 8.0
TABLE OF CONTENTS
1 Introduction ............................................................................................................................. 7
1.1 Purpose and Scope .......................................................................................................... 7
1.2 Corporate Management Framework............................................................................... 7
1.3 Management and Control of the CMF ............................................................................ 8
2 Corporate Governance ............................................................................................................ 9
2.1 Legal Structure................................................................................................................. 9
2.2 PDO Governance Model and Control Framework ......................................................... 10
2.2.1 Board Technical Committee .................................................................................. 11
2.2.2 Board Finance Committee ..................................................................................... 11
2.2.3 Board Audit Committee ......................................................................................... 11
2.2.4 Board Human Resources Development Committee ............................................. 12
2.2.5 Board Shell Services Committee............................................................................ 12
2.2.6 Major Tender Board Committee ........................................................................... 12
2.3 Business Principles, Values and PDO Code of Conduct ................................................. 13
2.4 PDO Aspired Behaviours................................................................................................ 15
3 Business Direction ................................................................................................................. 16
3.1 Policies ........................................................................................................................... 16
3.2 Business and Social Environment .................................................................................. 16
3.3 Stakeholders .................................................................................................................. 17
3.4 Vision ............................................................................................................................. 18
3.5 Corporate Strategy ........................................................................................................ 18
3.6 Business Objectives ....................................................................................................... 19
3.7 Business Risks ................................................................................................................ 19
3.8 Business Planning (Annual Programme) ....................................................................... 20
4 Business Management .......................................................................................................... 22
4.1 Organisation .................................................................................................................. 22
4.2 People ............................................................................................................................ 25
4.3 Managing Assets............................................................................................................ 26
4.4 Asset Management........................................................................................................ 27
4.5 Management Systems and Standards ........................................................................... 30
5 Business Results..................................................................................................................... 31
5.1 Performance and Reward .............................................................................................. 31
5.2 Business Review, Appraisal and Assurance ................................................................... 32
5.3 Assurance ...................................................................................................................... 33
5.4 Annual Assurance Letter Process .................................................................................. 33
Appendix – Abbreviations ............................................................................................................. 34
Revision: 8.0
Foreword
This PDO Corporate Management Framework (hereinafter referred to as “CMF” or Framework”)
documents our approach to managing PDO and will act as a framework to conducting our
business. It is an integrated framework of our company structure, roles, processes, policies and
assets, set out for us to manage our business in a responsible manner. It is our highest-level
control document.
It is required reading for our managers, department heads and supervisory staff. Designated
Process Owners, Policy Advisors, Risk Owners, Skills Managers and Asset Holders must be
thoroughly knowledgeable of their responsible areas and be active in promoting knowledge and
an attitude of continuous improvement to their work team.
Also with the rapidly changing environment and new initiatives being developed, this framework
will be maintained live on the PDO server to reflect any organisational, process & policy changes
or changes in our way of working.
I believe this framework provides a clear foundation for conducting our business in a controlled
manner, allowing all staff to place their day-to day activities within the context of the overall ethos
of PDO. I expect you to use this Framework to help us achieve higher performance levels in all
aspects of our business.
Raoul Restucci
Managing Director
Revision: 8.0
1 Introduction
1.1 Purpose and Scope
This Framework document describes what Petroleum Development Oman LLC (PDO) does,
how it is organised and how it conducts its business to ensure that all work performed on the
assets is appropriately controlled. This CMF will cover the following:
 Governance To define the boundaries in which we will work
 Assurance To demonstrate that suitable controls exist on the business
 Compliance To demonstrate that all legal and legislative requirements are
addressed
 Reference To be the first point of reference for Managers and Staff
 Induction To enable new starters to fully understand how we work
PDO is the corporate vehicle through which the Government and Private Shareholders
manage part of the upstream Exploration and Production (EP) business in the Sultanate of
Oman. The scope of PDO business from shareholder investment to delivery of oil and gas is
shown below.
EXPLORATION EVALUATION DEVELOPMENT OPERATIONS MAINTENANCE TRANSPORT
Design,
Identify and Create and construct,
$
Operate Maintain Transport
develop oil & evaluate oil modify and
wells and wells and store and
gas & gas abandon
facilities facilities deliver product
opportunities development wells and
opportunities facilities
1.2 Corporate Management Framework

The CMF represents the highest-level business control document in the Control Framework
giving all employees a clear statement on how they should conduct their work. The
framework shown below defines the business in terms of:
 Corporate Governance: The legal and governance structure which sets our
business principles and policies.
 Business Direction: Our business and social environment, stakeholder
aspirations that provides the basis for our mission and vision, business
objectives and business plans.
 Business Management: The provision and allocation of resources, tools and
techniques that will enable us to manage our business effectively.
 Business Results: How well are we achieving our targets?
 Business Review and Appraisal: How well we have performed to deliver on
our promises and what improvements can we make?
Revision: 8.0
CORPORATE GOVERNANCE
Legal Structure Governance Business Principles
DEFINES
THE
BOUNDARIES
BUSINESS DIRECTION
Business Policies
Business & Social Stakeholder

Environment Aspirations
EXPRESSED
IN OUR
Review & Appraisal
Mission and Vision
TRANSLATED
INTO
Business Objectives Business Risks
DETAILED
IN THE
Annual Programme
IMPLEMENTED
BY
BUSINESS MANAGEMENT
People & Organisation Business Processes
Managing Assets
ACHIEVES
BUSINESS RESULTS
Performance
1.3 Management and Control of the CMF

The Financial Controller (FCN) is responsible on behalf of the PDO Management Team for
the maintenance of the PDO Corporate Management Framework.
Any general queries or suggestions for improvement should be directed to FCN either
through the feedback facility on the web or by email.
Assurance on the continuing effectiveness of the CMF is provided through regular audits
undertaken by the Audit Department (FAM).
Revision: 8.0
2 Corporate Governance
2.1 Legal Structure
PDO is a Limited Liability Company (LLC) established in Oman to exercise all the rights and
obligations embodied in the Concession Agreement. The Company is owned by both
Government and Private Shareholders who are represented on the PDO Board.
This structure is represented in the diagram below:
GOVERNMENT
 Granter of the Concession
 Owns and sells 60% of Oil Produced 60%
 PDO Board Member
SHELL PETROLEUM COMPANY

LIMITED
 Technical Advisor 34% PETROLEUM DEVELOPMENT OMAN
 Concession Holder/Operator
 Non Profit Making
TOTAL  No Ownership of Oil
 Board of Directors
4%
10% PARTEX MARKET

2%
5%
PRIVATE OIL HOLDINGS OMAN
LIMITED
85%  Financial Rights of the Concession

 Owns 40% of Oil Produced
PDO does not own the oil – ownership resides with the Government (60%) and Private Oil
Holding Oman Limited (40%).
PDO is a cost company operating on the basis of making cash calls from the Government
(60%) and the Private Shareholders (40%) via POHOL.
PDO produces the oil and passes oil to the Government (60%) and POHOL (40%) at cost.
PDO also operates the Government Gas System and upstream LNG project on behalf of the
government via a contract under the control of the Gas Board.
Revision: 8.0
2.2 PDO Governance Model and Control Framework
Governance is the process by which it is ensured that PDO is properly directed, supervised
and controlled. This is achieved through the relationships between PDO management and
the shareholders by which policies are set, accountability established and performance
appraised.
The PDO Board has governance on all oil related activities. The Managing Director (MD) of
PDO is accountable to the PDO Board for business performance. The authorities and
responsibilities are set out in the Shareholder’s and Operating Agreement.
The Board delegates financial authority (within the approved programme limits) to the PDO
MD. Any additional investment proposals shall be subject to Board approval.
The PDO MD may delegate authority levels to members of the MDC, the Leadership Team
and other line and functional managers and supervisors. Delegated authorities are defined
in the Manual of Business Authorities which shall be established by the Board.
Refer to Manual Of Business Authorities
The four main components of PDO’s control framework can be described as under:
 Regulatory/ Legal Framework is the law of the land. PDO is fully compliant with
Omani rules & regulations.
 Foundation is the objectives, principles and rules that underpin and establish
boundaries for PDO activities.
 Organisation is how the various business activities are organised and managed.
 Processes refer to key control processes. Execution of these processes, taking
into consideration the foundations, organization and regulatory boundaries
ensures that PDO meets its business objectives.
These components provide reasonable assurance that PDO will achieve its objectives and
fulfil its external obligations and commitments.
Revision: 8.0
The following Board Committees have been established to provide appropriate advice to the
Board and shall receive reports from PDO that will:
 Enable each of the members of the Board Committee to review and monitor
progress of the business
 Provide a forum for the exchange of views on matters relating to the relative
Board Committee.
2.2.1 Board Technical Committee
 Review and make recommendations with respect to the technical and
operational aspects of the business plan
 Review the results of the Value Assurance Review process
 Monitor Asset Reference Plan progress
 Monitor Field Development Plan Progress
 Review Hydrocarbon Maturation (booking/de-booking)
 Review HSE issues
 Review Sustainable Development issues
2.2.2 Board Finance Committee
 The process of preparation of accounts
 The review of the annual budget
 Review the financial reporting and finance systems
 Review the financial aspects of the C&P policy, procedures and plans
 Review Investment Proposals
 Review changes to accounting policies
 Review of the Insurance programme
2.2.3 Board Audit Committee
 Review the appointment of external auditors
 Review financial statements
 Review the sign off of accounts
 Review the finance systems
 Review the effectiveness of the business control and internal audit process
 Review statements relating to internal control systems including those reported in
Annual Letters of Assurance
 Review the audit and assurance plan
 Liaise with the State Audit Institution
Revision: 8.0
2.2.4 Board Human Resources Development Committee

Shall act on behalf of the Board of Directors in:
 Approving the recruitment of all personnel in Job Groups 6-3 until such time as
the Board decides the recruitment procedures are adequate.
 Reviewing the recruitment of all personnel in Job Group 2+ until such time as the
Board decides the recruitment procedures are adequate.
Shall make recommendations to the Board in respect of:
 Manpower Budget
 Workforce capabilities, training and recruitment policies
 Compliance with Omanisation Targets
 HR Policies
 Changes to Senior Management Structure
2.2.5 Board Shell Services Committee

 Shell Services Enhanced Budget Proposal
 Performance measures developed by PDO
 Performance of PDO, when comparing Shell Services against competitive
services from the market place
 Progress of Strategic Alliance
2.2.6 Major Tender Board Committee

 The award of contracts and purchase orders
 C&P activities compliance with Board requirements
 C&P Strategies
 Approved bidders list
 The suitability of commercial models
 The performance of awarded contracts and purchase orders
Revision: 8.0
2.3 Business Principles, Values and PDO Code of Conduct
The PDO General Business Principles are the foundation on which our business strategies
and activities are based.
They are endorsed by our shareholders and apply equally to corporate decision making as
well as the individual behaviours expected of you when conducting business on behalf of
PDO.
They are the corporate glue that helps protect our reputation and it is the duty of every
employee to ensure that we adhere to these principles and uphold and protect the reputation
of our Company.
Our Business Principles will cover the following:
Objective The Company seeks a high standard of performance from its
employees to meet its stated objectives
Responsibilities There are various inter-related responsibilities of the Company:
 Shareholders
 Employees
 Those with whom we do business
 Society
Business Integrity The Company seeks honesty, integrity and fairness. All
transactions must be carried out in a transparent manner
and in accordance with the established procedures and
standards.
Company and The Company recognizes and values its relationship with
Community the Communities that live in the vicinity of its operation.
The Company has an established In-Country value policy
and endeavors to conduct its business in a way to secure
social license, encourage sustainable development and
achieve commercial benefits.
Health, Safety and The Company has an established HSE policy and endeavors
Environment to conduct its business in a way to protect the health and
safety of all its employees.
Communication The Company endeavors to disclose to legitimately
interested parties as much information as possible on its
activities.
Refer to Statement of General Business Principles (SGBP)
Revision: 8.0
PDO Code of Conduct

Following the core values and Business Principles, the PDO Code of Conduct instructs and
advises on how to avoid situations that may damage the employee or PDO. It sets standards
and shows how to achieve them. The Code does not exempt anyone, and every PDO
employee must operate within its boundries of rules and guidelines.
Refer to PDO Code of Conduct
Revision: 8.0
2.4 PDO Aspired Behaviours
The 5 “Aspired Behaviours” have been selected by our management as critical themes to
underpin our day-to-day work and help us deliver on our promises and especially our growth
strategy.
These behaviours are about us, our internal culture, and its relevance to all employees.
They will drive change and continuous improvement in the way we work, which is essential if
we’re to be successful in meeting our stakeholder expectations.
The “Aspired Behaviours” are External Focus, Commercial Mindset, Delivery, Speed, and
Simplicity. They run through all of our activities, provide the basis for improving our culture
of performance and competitiveness, and support our aim to put our shareholders and
stakeholders at the heart of everything we do.
The table below explains the “Aspired Behaviours” in more detail.
Revision: 8.0
3 Business Direction
3.1 Policies
Our Policies shall provide the means by which we communicate our intentions and
expectations. These Policies shall ensure that we maintain a consistent approach in all parts
of the organisation. All Policies shall be issued under the authority of the Managing Director,
and will be collectively owned by the MDC.
Each policy shall be allocated to an individual member of the MDC as the Policy Sponsor
according to the table below. The role of the Policy Sponsor is to ensure that the framework
for managing a policy exists, ensure that business standards exist that explain and
demonstrate to staff how each policy shall be implemented and finally, ensure that Codes of
Practice are followed.
The Policy Sponsor shall be the Policy Custodian responsible for providing annual
assurance of compliance to the management team. The Policy Sponsor shall be responsible
for instigating an effective policy review process and raising staff awareness of PDO
business policies.
POLICY SPONSOR POLICY SPONSOR
PL-01 Financial Data and FD PL-02 Treasury FD

Accounting
PL-03 Risk and Internal Control FD PL-04 Health, Safety and MD
Environment
PL-05 Governance FD PL-06 Information Management UID
and Internal
Communication
PL-07 Reputation EAD PL-08 Commercial FD
PL-09 Human Resources PCD PL-10 Security & Emergency UID

Response
PL-11 Asset Integrity and UEOD PL-12 Logistics UWD
Disposal
PL-13 Communication/ provision EAD PL-14 PDO Intellectual Property FD
of Information to Third
Parties
PL-15 Quality Management UEOD PL-16 Business Travel PCD
PL-17 In Country Value (ICV) FD
Refer to Business Policies
3.2 Business and Social Environment

PDO is the custodian of the major source of National income (oil and gas) and one of the
largest private sector employers in Oman. We manage a large and very diverse portfolio of
oilfields in terms of field sizes, reservoir types, oil types, development methods and
development maturity. The strategic direction of the business shall be to understand the
characteristics of the discovered STOIIP and its potential to generate reserves, production
and value on a cluster basis.
Revision: 8.0
To do this we shall improve the recovery factor through the application of a combination of
the following techniques:
 Water floods (WF)
 Well and reservoir management (WRM)
 Enhanced oil recovery (EOR)
The aim is to maximise production and minimise costs by following best oilfield practices. By
demonstrating operational excellence, we will earn the right for the investment required to
deliver long term performance.
We have a major responsibility to Omani society and shall be responsive to the broader
social and environmental needs of the society in which we operate. Our License to Operate
requires us to take economic, social and environmental considerations into account in all
decisions and find a better way to balance longer-term needs and short term requirements
specifically in terms of:
 The provision of oil revenues.
 The provision of employment and development of a skill base.
 The support and development of local businesses
 Minimising environmental impacts
3.3 Stakeholders
PDO has several important stakeholders and each of these stakeholders holds a different
set of aspirations. In setting our business direction, we shall seek to balance and reconcile
the needs of all our stakeholders and in doing so enhance our image and reputation. Our
key stakeholders are shown below.
STAKEHOLDER EXPECTATIONS REQUIRED PERCEPTION OF PDO
Increase both short and long-term revenue streams Preferred Operator
Government Create Employment opportunities for Omanis Responsible
Increase In-Country Value investment Reliable
Accelerate Omanisation Responsive
Engaging
To work responsibly
Society/NGOs Committed to Sustainable Development
To avoid damage to the environment Sustainability
An excellent employer
Involve local population in the business
A good neighbour
Local Respect for customs and traditions
Trusted
Communities Good corporate neighbour
Competitive employment package An excellent employer
Employees Recognition of contribution Trustworthy
Personal development and opportunities Fair and honest
Stimulating working environment Proud to work for
Targets to be achieved
Responsible
Lowest cost at maximum value
Reliable
Shareholders Continuous additions to reserves and new oil
Responsive
Sound HSE management
Trusted
Maintain asset integrity
Delivers on promises
Sound business controls
Contractors & Business opportunities Preferred customer
Suppliers Fair and even treatment Firm but fair
To ensure that we have a good engagement with our stakeholders, there is a stakeholder
plan addressing focal points and issues.
Refer to CP-111 Relationship with Stakeholders
Revision: 8.0
3.4 Vision
PDO is a leading and proud organisation, handling an incredible volume of activities in a
sound and professional manner. There is a strong competence and good levels of energy
across all directorates.
In order for us to be truly successful we must all be aiming towards a common direction.
Vision
To be renowned and respected for the excellence of our people and the value we create for
Oman and all our stakeholders.
The vision aims to reflect the aspiration that we have for PDO. More specifically we want:
 To secure the external recognition of the special company that PDO is.
 To deliver industry leading performance across our business.
 To recognise that ‘excellence’ today is not tomorrow’s and hence the need for a
continuous improvement mindset.
This vision also reflects the key values of shareholders’ expectations from the business, as
presented in the PDO Strategy Map. These shareholder drivers focus on creating and
sustaining value to the shareholders and the economy at large. Key strategic themes that
are fundamental to delivering the top line shareholder expectation are developed. Each
theme comprises internal processes and strategies providing the required organisational
focus in its area. Cross company enablers are recognised to be critical to ensuring the
successful delivery of the strategic objectives.
3.5 Corporate Strategy

PDO’s corporate strategy is reviewed annually at the start of the business planning cycle
and is outlined by the ‘Corporate Strategy Map’. At the top of the ‘map’ the shareholder
expectations are described with the key supporting strategic themes and individual strategic
objectives defined. Business critical cross company enablers are identified highlighting the
elements which will enable the staff to deliver the strategic objectives ultimately ensuring
that the Company meets the shareholder expectations and the Company’s vision.
Revision: 8.0
To be renowned and respected for the excellence of our people and the value we create for Oman and all our stakeholders.
Shareholder’s expectation
Sustainability
Plateau production Reserves & CR Grow Gas Business No harm to people and Enhance social
≥550kb/d for 10yrs replacement >1 to support demand the environment responsibility
Value
Cross Company Continuous Improvement Define, lead and increase ICV investment
Maximise Recovery Exploration Deliver Projects as Operational Excellence Cost Leadership

Promised
Minimise decline through Cream core plays Prioritise AIPSM Implement structural
Embed CPD
WRM change cost reduction
Deliver operate & initiatives
Mature new plays Make EMC/ODC work
Make EOR work maintain improvements
opportunities
Key strategic themes
Unlock value through

Rejuvenate/rationalise Uphold project assurance Realise well delivery Contracting &
Make unconventionals
aging assets & controls improvements Procurement
work
Focus on water-floods Develop resource based Reduce flaring

Exploit NFE/NI Pursue ICV
opportunities project delivery plans opportunities in goods,
Unlock CR portfolio Deliver energy efficiency
improvements services & skills in PDO
Commercialise tight gas Drive improvements in & with contractors
Optimise condensate
project governance &
production Ensure gas supply
execution management security Minimise NAG imports
Focus on depletion
compression projects Embed CWE
Enablers
Attract, develop & Strengthen information Exploit new Enhance stakeholder

Proritise Safety Embed Lean
retain staff management technologies engagement
3.6 Business Objectives

PDO’s objective is to engage efficiently, responsibly and safely in the exploration,
production, development, storage and transportation of hydrocarbons in the Sultanate of
Oman.
The Company seeks a high standard of performance with the aim to further the long term
benefits of its shareholders, employees and the society of the Sultanate of Oman at large.
3.7 Business Risks

Risks are those factors that could influence the achievement of our business objectives.
Risks shall include the “upside” opportunity and the downside “hazard”. PDO shall apply a
risk-based approach to internal control, designed to provide reasonable assurance to the
shareholders of achieving business objectives.
For each identified risk, a Risk Manager and Risk Advisor will be appointed to ensure that
the control measures are implemented effectively. It is the responsibility of the PDO
Management Team to develop and maintain a PDO risk profile, which identifies and
prioritises the management of risk. A risk response framework has been developed and
Risk Owners have been identified and are responsible for managing the critical risks.
Demonstration of the adequacy of the risk-response framework shall involve a quarterly
assessment of risk response framework by the Management Team.
Refer to CP-131 - Risk and Opportunity Management
Revision: 8.0
3.8 Business Planning (Annual Programme)

PDO shall employ an annual business planning cycle that shall deliver a challenging but
realistic business plan that meets shareholders expectations and moves the business
toward achieving the Vision. The process shall be represented in a Corporate Calendar
developed in December of the preceding year.
Refer to Corporate Calendar on the PDO Web
The Corporate Planning Cycle aligns the planning process with the key components of CMF.
The PDO Business Plan is based on the value creation opportunities in the assets. The
cycle integrates individual asset plans to produce one overall optimised plan for review and
approval by the Board of Directors. Once approved the Business Plan sets the targets and
budgets for the next year, as well as the expectations for the four years to follow. The key
milestones in the Business Planning Cycle are shown in the diagram below: (the corporate
calendar snapshot is a typical one and dates may vary each cycle)
PDO has many investment opportunities which are profitable and make good business
sense. As PDO is capital constrained, the company needs to carefully select which projects
to invest in. Economics provides the decision and bench marking tools, along with screening
hurdles, which enable investment in the most profitable projects. In addition, it quantifies the
value of projects and decisions, which PDO uses internally to manage risk and externally to
secure funding from Shareholders.
CORPORATE PLANNING CYCLE
The purpose of PDO's Corporate Planning Cycle is to provide a planning framework for the
company to review, plan and submit performance results, future strategies and investment
opportunities to the company's shareholders. It does not directly relate to the activities of the
current year but concentrates on the formulation of future strategies and plans. The main
components of this planning framework are to:
 Analyse and report performance from the previous year (Annual Appraisal)
 Inventorise Corporate Hydrocarbon Resources (in the ARPR)
Revision: 8.0
 Define and confirm the company's long term aspirations and outline and agree
with the Shareholders the Corporate Strategies and Objectives to be set for the
following year. Of particular importance, is the effective cascading of the agreed
corporate objectives to the individual teams, so that the teams can build their
plans against a clear and agreed set of guidelines
 Prepare a five year plan of activities, comprising investment projects, technology
projects and business improvement activities which will allow PDO to meet the
Corporate Objectives and maximising the long term value of the business whilst
providing short term return to shareholders (the Programme Build);
 Obtain shareholder approval for the programmed activities along with the
requisite budgets; (Shareholder Technical Meetings and Board meetings);
 Cascade annual performance targets from the Corporate plan to the teams within
the PDO organisation.
The Planning Responsibilities can be generally grouped under:
Execution Control: whereby PDO Assets monitor progress vs. plan on an ongoing basis,
plan corrective actions and short-term optimization.
Longer-term Strategic Planning: which involves aligning Business Improvement and
Programme Build, make long-term value-based plan
Communication: to re-energise PDO, ensure Shareholders are informed
Opex Planning: which involves corporate ranking of optimisation projects, monitoring of
progress vs. plan on improvement initiatives, closer liaison with Finance
Stakeholder Management: whereby PDO builds and maintains framework, ensures
compliance of programme and plan execution
Tools: which involve optimise use of Economic and PB tools and delivering budgets in SAP
Short-term Planning / Plan Optimisation includes
Purpose:
Monitoring progress vs. plan throughout the execution of Programme year 1, plan corrective
actions and short-term optimisation on an ongoing basis. Assure actual performance of
current year is reflected in annual Programme Build.
Accountabilities:
 Set-up and monitor performance indicators for Programme year 1 (new well
production, NFA declines, deferment, optimisation gains per field)
 Monthly status report on actual performance at Technical Director Group meeting
 Benchmark NFA and New Oil proposals against actual performance in annual
Programme Build
 Facilitate Programme optimisation, by maintaining a rankable project portfolio
 Carry out quarterly Rig Sequence Optimisation
Revision: 8.0
4 Business Management
4.1 Organisation
PDO shall conduct its business through a matrix organisation consisting of both Line and
Functional Directorates, each single point accountable for the management of a number of
assets. Each Directorate shall be headed by a Director of the company.
Refer to Organisation Charts

Board of Directors
A Board of Directors provides objectives and guidelines to the Managing Director. The
Board consists of twelve members and include the Chairman, His Excellency the Minister of
Oil & Gas, who represents the Government of Oman, and representation from PDO’s private
shareholders, Royal Dutch Shell, Total and Partex.
PDO Management Team
The PDO Management Team shares responsibility for the Company’s overall performance
and business direction, employee value proposition, HSE, and corporate social and
environmental responsibility. The Functional Directors are responsible for setting the
technical standards, the allocation of staff and their development in a particular discipline.
The assets are responsible for the implementation of those technical standards and
processes owned by the functions.
Revision: 8.0
At PDO, there are a variety of Corporate and Functional committees and regular meetings to
ensure that key business and people-related areas receive the right focus, discussion and
action. Following are the key Corporate and Functional Committees at PDO:
Corporate Committees:
1. Managing Directors Committee: The committee comprises the Company
directors and focuses on all areas of the business including the non-technical.
The committee represents the highest level of internal oversight of the
Company’s business. The committee is chaired by the Managing Director and
meets 3 times per month, or as required.
2. Technical Directors Group: The committee comprises the Company’s technical
directors and senior technical management. The group represents the sole
formal body for managing the Company’s technical and operational business.
The committee meets on a weekly basis and is chaired by the Technical Director.
3. Musharakah: Focuses on all continuous improvement initiatives to help the
Company establish a more effective and efficient working environment.
Functional Committees:
 Defalcation and Disciplinary: The Defalcation committee is responsible to
review and discuss all business integrity incidents and Blow the Whistle cases
involving potential breaches of PDO General Business Principles. The
Committee reviews all investigation reports and recommend further course of
action including reinforcement and mitigation of controls.
 Claims Committee: The Claims Committee reviews and decides upon the
findings of claims analysis and assessment and proposed recommendations.
They consider 1) rejection of claims where the initial claim submission was >
US$100,000; 2) negotiation and/or settlement >US$100,000; and 3) contractor
has instigated arbitration or other legal action related to the claim.
 Security and Emergency Response: To provide decision and steer on strategic
Security & ER issues.
 SAP & IM&T:
1. Endorsement and Steering PDO wide IM&T Strategy and Investments.
2. Ratify & Endorse PDO wide IM&T annual programme and budget.
3. Provide steer on strategic IM&T issues and step outs.
 Ras Al Hamra Development: To provide overall governance and oversee the
development project and endorse all key milestones as identified by the project
team.
 Pension Fund: Quarterly Trustees Meetings as per Omani Pension Fund Sub
Rule 5.4(i). These meetings are held to review the fund's performance and
endorse decisions on Pension Fund matters.
 People Steering Committee: To obtain cohesion in the matters pertaining to
staff across the whole company and to ensure consistency in implementation of
the agreed strategies. The key focus in on capability development.
 Social Investment Committee: To assess and authorize all social investment
proposals in all three streams (G&D, Corporate and strategic) projects, in
addition to monitoring the overall social investment performance.
 Minor Tender Board: Review Tendering Strategy, bidder lists, clarification and
award of all contracts and purchase orders with values of up to US$ 10 million.
Revision: 8.0
 Opex Initiatives Committee:

1. Review and steer for Opex reduction and optimisation initiatives around
the business.
2. Development of future strategies to optimise Opex.
3. Challenge of Programme Build Opex numbers.
4. Steering committee for SAVE.
 EMC/ODC Pan PDO Board: To ensure PDO’s EMC and ODC Contracts are
managed in a consistent and optimal manner across PDO and to ensure no pan
PDO opportunities are missed to improve the cost effective execution of EMC
and ODC Work scope whether delivered by the Contractor or supported by
Company staff.
 Procurement Steering Committee: To ensure that the commercial aspects of
PDO’s contracting and procurement strategies are sound, leveraging the market
to PDO’s strategic advantage and incorporate sustainability and quality assured
processes that are compliant with PDO’s Contracting and Procurement
Procedures.
 In-Country Value Steering Committee: To ensure that the total spend retained
in country benefits business development, contributes to human capability
development and stimulates productivity in Oman’s economy by omanisation of
skilled contractor personnel and increasing the in-country spend on goods and
services.
Interfaces with the Government:
The Ministry of Oil & Gas (MOG), together with other Ministries, exercises certain monitoring
controls on PDO to ensure compliance with regulatory requirements. This shall range from
formal approval of technical work such as Reserves Booking, to monitoring that mandatory
requirements of Omani Law or legislation are being applied.
 The Chairman of the Board of Directors: MD and TD meet regularly with the
Chairman to discuss significant issues affecting PDO operations and
performance, and long term developments.
 Government Directorates: Regular communications and meetings between
PDO senior asset and functional management and the corresponding Ministry
Directorates.
 The Gas Board: Board meetings are held twice each year with the Board
comprising the Government members of the PDO Board of Directors; MD, TD
and GD shall attend these meetings. In addition, regular quarterly meetings are
held between GD and the MOG - Director General of Planning & Project
Evaluation and the Director General of Oil & gas development & Production.
Other government organisations significantly influencing PDO activities include the Ministry
of Finance, Ministry of Manpower, Ministry of Higher Education and the Ministry of
Environment. These key interfaces shall be planned, executed and reported in accordance
with the Stakeholder Engagement Plan.
Refer to CP-111 Relationship with Stakeholders
Interface with Shell:
In the Global context, PDO shall be classified as a Joint Venture Company operating as a
part of the Shell Upstream International Non-Operated Venture Group.
Revision: 8.0
4.2 People
Accountability and Responsibility:

Accountability is the obligation to deliver results. In PDO, everyone is accountable for their
agreed contribution to business results. Delivering agreed results should form the basis of
the performance contract of each individual. As accountability is the basis for personal
appraisal, it cannot be shared or delegated. Responsibility is the requirement for an
individual or team to undertake a task, activity or process. Essential responsibilities (doing
the work) are complementary to accountabilities (delivering results).
Leadership:
Shall be the key to creating the right attitude and developing the behaviours required in the
organisation. Leaders will;
 Be role model the desired behaviours and attitudes that are consistent with and
align toward the achievement of PDOs Vision
 Be responsible and accountable for the creation and delivery of their individual
Performance Contracts and hold their teams responsible for their censure
decisions do not take longer than necessary. If a decision is lagging, they will
commit to getting it resolved and then adhere to it
 Be responsible and accountable for creating an environment within which
employees can develop their skills, knowledge and competency in order to
maximize their contribution toward the commercial and technical success of PDO
 Promote effective and efficient decision making and a “delivery” focused mindset
 Seek to create and sustain an environment where constructive challenge is
valued and where decisions once taken are actively supported
Skillpool Management:
Developing the leadership, managerial and technical skills required to ensure the long term
sustainability of our business remains a strategic imperative. Responsibility is shared across
the business with the following stakeholders playing a key role.
The MDC, representing the most senior leaders in the business, are responsible as role
models and key sponsors ensuring that the sufficient time and focus is spent on the
development of staff.
The Human Resource Function is responsible for ensuring that the policies, processes and
procedures are in place to ensure the business attracts high caliber personnel and is able to
build on the skills, knowledge and competency which staff bring to PDO.
Skillpool Managers are responsible for the management of the “skill pool” within each
function ensuring the consistent and effective delivery of processes and procedures,
including but not limited to the creation and maintenance of competency profiles, creation of
Personal Development Plans and the establishment of training plans and related job
assignments etc.
Individual employees are ultimately responsible for their personal development and are
expected to engage with the other stakeholders to ensure appropriate and realistic plans are
in place.
Revision: 8.0
4.3 Managing Assets
Assets shall be classified as anything that has potential value to the company. Therefore
they shall be effectively maximised and optimised. Our assets are grouped into four
categories further described below:
 People
 Information and Knowledge
 Financial Assets
 Physical Assets.
People:
People are our main asset and as such we shall follow the key components of the Shell HR
People Principles described under the People section 4.2.
Information and Knowledge:
Optimum development and use of the information assets of all stakeholders is crucial to
enable PDO to meet its objectives. How PDO manages Information Security, Documents,
Data and Knowledge management in the business is explained in the following documents.
Refer to PL-06 Information Management Policy
Financial assets:
Shall be those monetary items (such as cash, credit, debts, share capital and loan capital)
over which PDO has control. It is critical that these financial assets shall be properly
managed and used to support the organisation’s goals.
Refer to PL-01 Financial Data and Accounting Policy
Physical Assets:
Shall be those physical assets within the Oil and Gas Clusters (hydrocarbon resources,
facilities and equipment) directly related to our core business together with offices,
warehouses and their associated equipment. We shall ensure that safety and integrity is
never compromised.
Revision: 8.0
4.4 Asset Management
The portfolio of physical assets shall be segmented into “easy to recognise” clusters shown
below.
This segmentation shall be based on (similar) reservoir type, oil type and reservoir
development method (current and future) with common surface facilities or close
geographical vicinity.
Revision: 8.0
STOIIP
Scope
Undeveloped Developed Produced
Reserves Reserves Volumes
VAR 1 VAR 2 VAR 3 VAR 4 VAR 5
FDP FID
OPPORTUNITIES
STUDY / TECHNOLOGY / ECONOMICS DRILLING / NEW OIL PRODUCTION / NFA (WRM)
IDENTIFY & ASSESS SELECT DEFINE EXECUTE OPERATE
VALUE CREATION VALUE REALISATION
As shown above, we will manage this portfolio to economically grow and develop the oil &
gas reserves base by creating opportunities of choice. This will enable the development of a
sustainable production level, with a reserves replacement ratio greater or equal to 1, over
any given planning period. The approach will be based on creating a “Balanced” portfolio of
opportunities for each cluster, considering the full life cycle of the fields within the cluster
captured in Field Development Plans (FDP) Asset Reference Plans (ARP) and Project
Implementation Plans (PIP).
These documents shall be developed at cluster level and contain the knowledge and
information necessary to manage an asset to its maximum value throughout its lifecycle.
The relationship of these documents to the asset lifecycle is shown below:
Explore Appraise Develop Operate Maintain Abandon
Identify &
Select Define Execute Operate Abandon
Assess
Field Development Plan

(FDP)
Asset Reference Plan

(ARP)
Project
Implementation
Plan (PIP)
Project
Implementation
Plan (PIP)
Revision: 8.0
The ARP shall describe all the key aspects of an asset over its life cycle, e.g. asset status,
economic performance, asset business issues, operating and maintenance philosophy,
technical integrity specification and operations planning.
Refer to Asset Reference Plan Guideline
Business Plans:
A Business Plan shall be developed for all Directorates to capture all major activities
occurring during the year that have an impact on performance together with clear
performance measures and targets.
Refer to Business Plan Guideline and Business Plans
Service Level Agreement:
Services shall be based on a supply and demand relationship as shown opposite. This
relationship shall be defined in Service Level Agreements in the form of Heads of Agreement
Documents specifying the nature, scope and flexibility of service to be provided, together
with a tariff and full description of the way in which performance is measured and reviewed.
EXPLORATION and PRODUCING DIRECTORATES
Demand
Service Level
Agreements
Supply
TECHNICAL AND CORPORATE SERVICE PROVIDERS
Revision: 8.0
4.5 Management Systems and Standards
PDO Business Control documentation shall be defined as follows:
CMF
Provides Business
Direction
POLICIES
Statement of PDO’s attitude in
response to a business need
CODES OF
PRACTICE
Translates a Policy into practical activities to
be executed repeatedly
PROCEDURES SPECIFICATIONS
Formal description for executing Prescribes requirements to be fulfilled
an activity to achieve a result in by a product, process or service in line
accordance with the Specification with the Code of Practice
GUIDELINES
Conveys advice or guidance aimed at resolving,
clarifying or interpreting a requirement
 Policies are mandatory, and provide the course of action stating intentions and
principles.
 Standards (such as Codes of Practice and specifications) are mandatory, and
provide the rules and an overview of the required Procedures and Guidelines.
PDO shall adopt minimum standards as required
 Procedures are mandatory and describe the purpose and scope of an activity
and the specific way the activity is to be performed to achieve a satisfactory
result.
 Guidelines are not mandatory and advise how an activity or task is best
performed.
All PDO Management System related documentation shall be prepared in accordance with
the Business Control Documentation Hierarchy, registered in the Live-Link document
management system and subject to formal change control. The document owner/custodian
shall review the document periodically and re-confirm customer requirements.
Proposals for changes to these documents shall be discussed and agreed with the key
customers, contractors, suppliers and involved parties. Responsibilities for approval of
management system documentation and any subsequent changes to these documents are
indicated below.
 Policy Managing Director
 Codes of Practice Functional Director
 Procedures Corporate Function Discipline Head
 Specifications, Guidelines Corporate Function Discipline Head
Refer to CMF Document Control
Revision: 8.0
5 Business Results
5.1 Performance and Reward
We shall strive to support a working environment that stimulates continuous and sustained
improvement in business performance. Performance and Reward shall be a vital component
of this working environment. The performance process is shown below and described in the
Performance Guideline in the link below.
Refer to Performance Management Framework
Corporate Scorecard:
Company overall performance shall be measured using a Corporate Scorecard made up of
Key Performance Indicators weighted to reflect the relevant importance to the business.
Each of these KPIs shall provide a means for assessing performance against Business
Objectives. Performance shall be determined by a Business Performance Factor (BPF)
which is the sum of the weighted points for each KPI giving an outcome of between 0 and 2
with 1 being equal to “on target” performance. Greater than 1 shall be “above target”
performance and less than 1 shall be “below target” performance.
Refer to Corporate Scorecard
Personal Performance Contracts:
Annually each individual shall have tasks and targets agreed in Personal Performance
Contracts. Individual performance shall be assessed and ranked as part of the Staff
Appraisal process and expressed in terms of a Performance Rating.
Refer to Create PPC Document and Set Objectives
Revision: 8.0
5.2 Business Review, Appraisal and Assurance
Review and appraisal shall be achieved by a combination of both Self-Assessment and

Independent Assessment as shown below.
Board Internal to PDO External

Governance To PDO
Set
 Objectives, Strategies
Plan  Policies and Standards
 Plan, Budgets and
Scorecard
 Risk Profile
Appraise
 Risk-based Control
Based on PDO self Independent Framework
assessment of: Assessment
 Performance Appraise
 Strategy Self Audit and Review
 Risk-based Control Assessment  Performance (Internal &
 Strategy
Framework  Risk and Controls External)
Assurance Letters  Business Control

Reviews
Assurance  BAL  Value Assurance
 IMR Reviews
Assurance  Post Implementation
Letters Reviews
 External Audit etc.
Self-Assessment:
Delivering on promises shall be a goal for the organisation and as such we will provide a
transparent focus on performance and improvement. The overriding principle shall be that
PDO performance overrides any individual directorate performance. We shall deliver the
plan and not just deliver the target. Performance Reviews shall be held quarterly and will
present:
 A clear presentation of company and directorate performance against the agreed
plan
 The identification of areas of critical importance which requires specific attention
 Clearly defined mitigation and corrective actions proposed to address
performance variance
 Provide essential base information for monitoring performance on the year
A formal annual “look back” is carried out in January to:
 Review of results against the agreed plan and scorecard of the programme year
 Appraisal of corporate strategies to meet objectives and goals
Using this data we will identify benchmarking opportunities to measure our results against
“Best in Class” companies from both inside and outside the oil and gas industry, establish
the real competitive position and identify best practices to be followed in our drive for
continuous performance improvement.
Revision: 8.0
Independent Assessment:
The shareholders shall instigate an independent assessment of the PDO business. It may
be covered in separate reviews of performance, appraisal of strategy and a review of PDO’s
self-assessment and assurance letters.
5.3 Assurance
PDO shall establish a risk-based Integrated Assurance Plan covering all internal and
external audits, reviews and self-assessments. The plan shall be comprehensive, flexible
and cost effective and must be able to test the integrity of the risk-based control framework.
Assurance shall also include the process for the assessment of PDO accounts by external
auditors, the process for handling Incidents Management and Reporting (defalcations,
avoidable losses etc.) and the process for the Annual Assurance Statements.
The Integrated Assurance Plan shall cover all elements of assurance within PDO, including,
but not limited to:
 Internal Audits (Business Process & Contract Management)
 Health Safety & Environment Audits
 Security Audits & Reviews
 Value Assurance Reviews (Internal & External)
 Compliance Assurance (SAP-Processes and Contract Compliance)
 Technical Reviews and Health Checks (T&OE)
The plan shall be reviewed and endorsed by the PDO Internal Assurance Committee (IAC)
prior to submission to the Board Audit Committee for approval.
The PDO Internal Assurance Committee shall meet at least quarterly to review progress
against the Integrated Assurance Plan, together with key findings, controls incidents,
resourcing and the overall assessment of the control environments based on inputs from all
assurance providers.
The IAC will be chaired by the MD and attended by the members of the Managing Director’s
Committee, with the Internal Audit Manager (FAM) acting as Secretary.
The Internal Audit Manager shall report to the Board Audit Committee in respect of the risk-
based Integrated Assurance Plan, progress and key findings, business control incidents and
the status and trend of overall business control and the effectiveness of the assurance
processes.
5.4 Annual Assurance Letter Process

The Finance Controller (FCN) shall be responsible for the integrity of the process.
The PDO Managing Director and Finance Director shall approve Annual Assurance
Statements in respect of the internal control system and regulatory compliance and shall
submit these Assurance Statements to the Board in accordance with the prescribed
timetable.
Revision: 8.0
Appendix – Abbreviations
ARP Asset Reference Plan
BPF Business Performance Factor
C&P Contract and Procurement
CFDH Corporate Functional Discipline Head
CMF Corporate Management Framework
EOR Enhanced Oil Recovery
EP Exploration and Production
FAM Audit Department
FCN Finance Controller
FDP Field Development Plan
HR Human Resources
HSE Health, Safety and Environment
IBTR Integrated Business Technical Review
ICV In-Country value
ICVD In-Country value Director
KPI Key Performance Indicator
LNG Liquid Natural Gas
MDC Managing Directors Committee
MOG Ministry of Oil & Gas
PDO Petroleum Development Oman LLC
PIP Project Implementation Plans
POHOL Private Oil Holding Oman Limited
T&OE Technical Reviews and Health Checks
VAR Value Assurance Review
WF Water Flood
WRM Well and Reservoir Management

CP-107 Corporate Management Framework CoP PDO

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Petroleum Development Oman L.L.C.

Document Title: Corporate Management Framework

Document Type Code of Practice

Security Restricted – PDO Staff Only

Owner Managing Director

Issue Date June 2014

This page was intentionally left blank

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ii. Revision History

April 1997 1 First Issue.

December 1999 2 Build on foundations of original document.

Provide clarity on strategy and decisions made.

Capture feedback received from the organisation.

November 2003 3 Actions from CMF Review incorporated.

Re-structured to reflect current strategy and reinforce

January 2004 4 Approved for Issue.

August 2010 6 Reformatted and Reviewed.

January 2014 7 Reviewed and Updated.

Changes in Corporate Vision, Strategy & Corporate

PDO Control Framework Introduced.

June 2014 8 Reviewed, reformatted and Updated.

Introduction of the In-Country Value Directorate (ICVD).

iii. Related Corporate Management Frame Work (CMF)

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1.2 Corporate Management Framework

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Business & Social Stakeholder

Mission and Vision

Business Objectives Business Risks

People & Organisation Business Processes

1.3 Management and Control of the CMF

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SHELL PETROLEUM COMPANY

10% PARTEX MARKET

85%  Financial Rights of the Concession

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2.2 PDO Governance Model and Control Framework

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2.2.4 Board Human Resources Development Committee

2.2.5 Board Shell Services Committee

2.2.6 Major Tender Board Committee

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2.3 Business Principles, Values and PDO Code of Conduct

Refer to Statement of General Business Principles (SGBP)

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PDO Code of Conduct

Refer to PDO Code of Conduct

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2.4 PDO Aspired Behaviours

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POLICY SPONSOR POLICY SPONSOR

PL-01 Financial Data and FD PL-02 Treasury FD

PL-09 Human Resources PCD PL-10 Security & Emergency UID

PL-17 In Country Value (ICV) FD

Refer to Business Policies

3.2 Business and Social Environment

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3.5 Corporate Strategy

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Maximise Recovery Exploration Deliver Projects as Operational Excellence Cost Leadership