Sunday 22 / September / 2024
Muscat: The Ministry of Energy and Minerals celebrated the launch of the "Majd" programme, designed to enhance local content within Oman's energy and minerals sectors.
The event was attended by Dr Said bin Mohammed Al Saqri, Minister of Economy, and Salim bin Nasser Al Aufi, Minister of Energy and Minerals. In attendance were representatives from major oil and gas, renewable energy, and mining companies, as well as distinguished guests from the public and private sectors.
The "Majd" programme is distinguished by its ability to transform challenges into opportunities through innovation, contributing to the creation of a national economy where local companies are active partners in driving growth and development. It empowers ambitious Omani youth to invest their productive and creative energies. The programme's unified identity fosters trust and alignment among all stakeholders, from local investors to international partners, creating a conducive investment environment for foreign direct investment and boosting investor confidence in the Omani economy. The program's new visual identity reflects the positive values of local orientation within the energy and minerals sectors, aligned with Oman Vision 2040. This vision encompasses promoting local procurement, building sustainable human capital and manufacturing capabilities in these sectors, which are fundamental to economic and social development.
The event’s sponsor, Dr Said bin Mohammed Al Saqri, Minister of Economy, emphasized that the Council of Ministers' approval of the National Local Content Policy (2024-2030) embodies Oman's strategic direction to provide comprehensive support to national industries and service activities, and empower entrepreneurs and the private sector to drive growth and expand economic diversification sectors.
Al Saqri emphasised that the energy sector is a primary pillar supporting Oman's economic and social development, and is a leading sector in initiating programs that enhance local content in energy sector activities. Total spending on small and medium-sized enterprises in the oil and gas sector in 2023 amounted to approximately 16% of the total value of purchases and tenders in the sector. Al Saqri noted that the energy sector is among the core sectors that are being focused on to expand the national local content system. The launch of a package of local content programs in the energy and minerals sectors today will further expand this national system across all sectors and increase the value of local content in the energy sector, especially given its growing role in supporting promising sectors such as renewable energy, green hydrogen industries, and the mining sector, as one of the targeted sectors to support the diversification objectives in the 10th Five-Year Plan (2021-2025).
Al Saqri emphasized that Oman's local content policy is anchored on 4 fundamental pillars. The 1st pillar pertains to supply chains, encompassing all activities and processes from the arrival of raw materials at manufacturing companies to the final delivery of products to the end consumer. The 2nd pillar is dedicated to developing the national workforce, where the local content system will play a pivotal role in creating job opportunities and targeted training programs aimed at enhancing skills and building national capabilities. The 3rd pillar is centred around fostering innovation and technology transfer with high technical content. The 4th pillar focuses on nurturing entrepreneurial activities by prioritizing local small and medium enterprises in government project contracts and procurement. His Excellency further noted that Oman continues to strengthen its focus on leveraging local content through various programs and initiatives, including the establishment of the National Office for Local Content, which is tasked with enhancing project execution efficiency across various sectors and realizing national returns that contribute to stimulating the national economy and building national capacities for the workforce involved in government projects and contracts. Additionally, a mandatory list has been implemented to ensure that small and medium enterprises benefit from contracts and tenders on the Esnad platform, which is affiliated with the Tender Board. Moreover, the regulatory bylaw for registering suppliers, contractors, and consulting firms has been enforced, and the National Product Loyalty Program has been launched to support and promote Omani products.
In his keynote address at the inauguration ceremony, Salim bin Nasser Al Aufi, the Minister of Energy and Minerals underscored that enhancing local content in the energy and minerals sectors represents a pivotal stride towards achieving sustainable economic development. He further elaborated, 'Through the Majd Local Content Program, we are steadfast in our commitment to bolstering the role of domestic companies, localizing industries, and nurturing national talent. We shall continue our endeavours to realize the economic and social aspirations of the Sultanate of Oman, ensuring sustained growth and prosperity for future generations.'
Al Aufi elucidated that since its inception in 2013, the local content program within the energy and minerals sectors has contributed an excess of 33 billion US dollars to Oman's economy. Moreover, it has facilitated the implementation of over 90 local content opportunities, resulting in the establishment of more than 100 industrial facilities or workshops with investments exceeding 400 million US dollars, in addition to creating over 3,000 direct jobs in the private sector. Furthermore, support for small and medium-sized enterprises has continued to grow, with expenditures surpassing 1.5 billion US dollars in 2023. The unified registration platform, now encompassing over 6,500 companies, including more than 5,500 local firms, has also been developed.
Al Aufi noted that the Omanization rate in companies operating within the oil and gas sector has reached 92%, reflecting the sector's dedication to developing Omani cadres and contributing to economic development. We are all aspiring to overcome the challenges of the coming phase and its demands for economic development, diversifying revenue sources, building an advanced economy, and fostering a competitive labour market. Among the most prominent of these challenges are ensuring the creation of sustainable jobs in line with the Royal directives, supporting the industrial base to enhance the competitive environment and the capacity of economic system participants, guaranteeing investment attractiveness, particularly through developing opportunities related to strategic or high-impact products and services. Finally, we must endeavour to transfer this experience to the minerals, renewable energy, and hydrogen sectors, and to undertake comprehensive planning for all upcoming strategic and developmental projects.
In a concerted effort to bolster the mission of the Majd Local Content Program, 12 agreements across diverse sectors were inked during the event, with a combined value exceeding 172.5 million US dollars. Notably, all agreements and business awards incorporate a mandatory expenditure with small and medium-sized enterprises or ventures affiliated with the entrepreneurship program. Additionally, they mandate the procurement of local products and adherence to Omanization plans as integral components of the integrated local content plans outlined in the contracts.
The scope of the signed agreements spans construction projects and comprehensive service contracts. For instance, Nama Dhofar Services inked pact an agreement with Galfar Engineering & Contracting to develop a water treatment plant. Similarly, Oxy Oman entered into a contract with Jalmood National Company for integrated drilling and development services.
To further promote the localization and sustainability of domestic manufacturing, Petroleum Development Oman signed 3 agreements to supply products from Omani factories. 2 contracts were awarded to Spira Power Gasket Factory and Gulf Gasket Factory, respectively, for the supply of gaskets. An additional agreement for the supply of industrial fasteners was signed with Gulf Fasteners and Metal Industries. These agreements underscore the ongoing focus on developing industries producing essential products for oil and gas production and processing operations.
Furthermore, Occidental Oman signed a contract with Duqm HongTong Piping for the supply of reinforced thermoplastic pipes. This agreement represents a significant milestone in the development of local manufacturing capabilities, as the factory successfully met the technical requirements for construction and operation. It also reflects the sector's commitment to the local content objectives of industrial localization.
Furthermore, several agreements were signed with small and medium-sized enterprises to provide various services. For instance, Daleel Petroleum Company entered into a contract Al-Nujum Professional Energy Services Company. Notably, the latter company boasts a workforce entirely composed of local skilled personnel to execute these technical services. Such agreements are poised to enhance the competitiveness of local offerings in this service segment and reflect the tangible development of domestic capabilities. Additionally, Nama Water Services signed a contract with Al Ansi Trading and Contracting Company for the maintenance of water networks in the North Al Batinah, South Al Batinah, Al Dhahira, Al Dakhiliyah, North Al Sharqiyah, South Al Sharqiyah, and Al Wusta Governorates. The contract encompasses a wide range of services, including construction, rehabilitation, repair of breakdowns, and the extension of water networks in these governorates.
In an endeavour to develop local capabilities in a novel service category, Occidental Oman signed an agreement with Al Aman Al AwwaliCompany for leakage monitoring and treatment services at processing and gathering facilities. This agreement, along with another signed with Sakan Facility Management, reflects the vision of developing service providers among local companies. Occidental Oman awarded the contract to Sakan based on a business development plan designed to align the company's operations with the required service standards. It is noteworthy that Sakan Facility Management is a community company with over 10 thousand shareholders from a group of 6 community companies. The scope of the agreement primarily focuses on the maintenance of residential facilities in the Mukhaizna field.
Furthermore, 2 agreements related to employment-linked training programs were signed, with the anticipated creation of at least 380 training and employment opportunities for Omani graduates holding bachelor's and diploma degrees. Petroleum Development Omansigned an agreement with the Oman Energy Association(OPAL) to plan, implement, and fund an employment-linked training program. Both parties aim to cultivate a national cadre capable of meeting the demands of the energy sector's labour market.
Concurrently, BP Oman and the Oman Energy Association (OPAL) signed agreements for the 3rd edition of the Ruwad program, which has achieved remarkable success since its launch in 2022. This program is designed to prepare graduates by equipping them with the skills required by the job market. Other energy sector companies participating in the program as partners include Abraj Energy Services, Baker Hughes International, Seven Seas Petroleum, KCA Deutag, and Nafath for Renewable Energy.
In addition to the relevant government entities, the inauguration ceremony brought together major operating companies in the energy and minerals sectors, including Petroleum Development Oman (PDO), OQ Group, Oman Liquefied Natural Gas LLC (LNG), BP Oman, Oxy Oman, Oman Shell, Daleel Petroleum Company, CC Energy Development, Nama Group, and Minerals Development Oman. These companies showcased their efforts in enhancing local content by driving the growth of local industries, developing national competencies, increasing Omanization rates, and supporting the growth of local suppliers to reduce reliance on foreign imports.
The ceremony concluded with the announcement of the "Majd" Awards, aimed at recognizing contributions to enhancing local content. These awards serve to motivate companies and individuals to redouble their efforts in advancing local content in alignment with the national objectives outlined in Oman Vision 2040. The program extends beyond initiatives and frameworks related to developing local competencies, products, and services; it also encompasses the professional values and ethics that should characterize every project and activity, underscoring the energy and minerals sectors' commitment to quality, innovation, and sustainability.
