The Oil and Gas Industry

In-Country Value Development

Blueprint Strategy
2013-2020, Sultanat of Oman

We have instructed our government to focus, in its

future plans, on social development, particularly its
aspects related to the daily lives of citizens. This should
be achieved by the creation of renewable employment
opportunities and training programmes for citizens and
promoting production capacity, as well as scientific,
cultural and intellectual development. We will closely
follow the steps taken in this field His Majesty Sultan
Qaboos Bin Said, Sultan of Oman

ICV - A National priority

In-Country Value (ICV) forms part of the National agenda for increasing and
improving the sustainable employment of Omani nationals together with
improving the incorporation of Omani goods and services within the procurement
processes of local companies.

What is In-Country
Value?
ICV is the total spend retained
in-country that can benefit
business development,
contribute to human capability
development and stimulate
productivity in the Omani
economy. In short, products
made and services provided
by skilled Omanis.

A unique opportunity

Investments in the oil sector

will be in excess of $60-70
billion over the 2013-2022
timeframe, while the gas sector
will attract more than $40 billion
in exploration and production
related investments.

Role and contribution of the Oil and gas industry in

stimulating Omans economy
Within the oil and gas industry, ICV is an initiative which is fully supported by
the Omani Ministry of Oil and Gas, the Oman Society for Petroleum Services
(OPAL) and the oil and gas companies in Oman. They acknowledge the industrys
significant role in stimulating and positively impacting the economy in Oman.
The Ministry of Oil and Gas formed an ICV Committee, chaired by His Excellency
Under-Secretary of the Ministry of Oil and Gas. The committee groups government
representatives and executives from the major oil and gas companies. The role of
the ICV Committee is to provide guidance and governance to ICV development
and raise opportunities while coordinating the efforts of the industry. Two
specialist sub-committees have been created to support the ICV Committee: the
Contract and Procurement managers sub-committee and the Human Resources
managers sub-committee.

Building on ICV success to date

The ICV Committee has already launched initiatives aimed at developing ICV
with successful results. Those initiatives tackle several areas, such as:
 evelopment of the local workforce through employment of Omanis,
D
implementation of expatriates succession plans, and investment in dedicated
training and education programs,
Increase of local sourcing mainly through tendering, long-term business
agreements, and business development support,
 nhancement of the business environment and development of the required
E
infrastructure to support local businesses and Foreign Direct Investments (FDI)
through government driven projects,
Implementation of a Joint Supplier Registration System (JSRS) as a single
window system for registration of Omani registered suppliers in a common
pool of oil and gas supplier base, and
Definition of a standard approach to contractual Terms and Conditions.
The ICV Committee recognizes that further ICV development requires a
collaborative and coordinated ICV development programme underpinned by
an industry ICV blueprint strategy based on a detailed analysis of the industrys
future demand and the current constraints and gaps.

Participating entities

A joint effort to review the oil and gas industry

ICV blueprint strategy
The ICV Committee, through its Contract and Procurement managers subcommittee and with the support of Accenture Management Consultancy,
carried out a comprehensive study to review the oil and gas industry ICV blueprint
strategy.
The goal of the study is to build on the success to date, identify new pan industry
opportunities and develop a comprehensive roadmap aiming to maximize the
contribution and efforts of the oil and gas industry in ICV creation in Oman.
In line with government objectives, the roadmap includes of two main streams:
Sustainable and balanced industrial growth through the expansion and
the launch of new industries, activities, products and services in Oman. This
allows Oman to retain part of the value that is currently imported, create new
jobs, and stimulate the economy through the value chain and the multiplier
effect, and
 uman resources development to increase Omanization levels in targeted
H
areas and improve competency levels to internationally recognized standards.

Assessing industry demand

and supply gaps to identify
new ICV opportunities
The study is based on a bottom-up quantitative and qualitative gap analysis that
allowed to:

What is a Local
Company?

 uantify and consolidate oil and gas industry demand in Oman to assess the
Q
feasibility of new sustainable ICV development opportunities,

The study defines a local company

as any company established and
operating in/from Oman based
on the Ministry of Commerce and
Industrys definition.

 easure the local supply markets current capability and capacity to provide
M
the required goods and services, and
Address activities and businesses throughout the overall value chain.
Inputs for the analysis have been consolidated from the oil and gas companies,
the local suppliers and governmental bodies and organisations.

Bottom-up gap analysis approach

Demand
consolidation

Goods and
services

Supply
assessment

oil and gas industry

Local supply market

Consolidated
demand forecast

Current Capacity
and Capability

in key selected goods

and services over
the period 2013-2020

overview

Gap
measurement

Gaps in the local

supply market

Required

Workforce

Workforce
for Oil and gas industry
supply market
activity over the period
2013-2020

Current size and

distribution
of the workforce within
oil and gas industry

Gap in oil and

gas industry
workforce

Approximately

USD

64bln

Additional ICV
opportunity down the
value chain, over the
period 2013-2020

Significant value already retained through the oil and gas

companies direct expenditures
Initial analysis show that thanks to the achieved and on-going ICV development
initiatives, a significant proportion (more than 80%) of the direct expenditure of
the oil and gas companies goes to local suppliers (as per the study definition).
The initiatives have managed to constantly increase the employment of Omanis,
especially within oil and gas companies and major service providers.
Omani contractors and suppliers are already witnessing increased demand from
the oil and gas companies following the introduction of ICV across the oil and
gas industry.

Deeper analysis down the value chain to track

the retained value
Further detailed analysis, down the value chain, indicates that an additional ICV
opportunity of USD64 billion exists over the period 2013-2020 (excluding the ICV
generated by the multiplier effect).
This additional opportunity consists of:
 nhancement and expansion of the oil and gas companies direct sourcing and
E
employment of Omanis,
Localization of contractors and suppliers sourcing (goods and services), and
Development of contractors and suppliers local workforce.
The ICV blueprint strategy has been defined to address this opportunity
progressively, through a collaborative and coordinated ICV development
programme broken down into specific initiatives involving the contribution of all
relevant stakeholders.

An overarching ICV blueprint

strategy for the oil and gas
industry
A mission and an overarching strategy has been defined to provide a coordinated
and integrated ICV development programme. The oil and gas industry is confident
that beyond the strong commitment of all stakeholders, optimal ICV development
requires enhancing the competitiveness of the local market with international
standards and providing sustainability to the local business community by
investing in and implementing short and long term initiatives.

Our Mission:

Developing a competitive and sustainable

local supply market: goods, services
and skillstogether!
The mission will be delivered through an overarching strategy by:
Leveraging the oil and gas industry collaborative efforts to progressively
and effectively develop the Omani supply market and enhance the ICV
development environment.
The strategy is broken down into six dimensions: Human Resources, Technology
& Innovation, Capital & Finance, Contracting & Tendering, Legislation &
Process Improvement and Business Development.

Human Resources

Increase the competency level and

productivity of the local workforce and
emphasize the development of intellectual
capital to the drive performance in
technical and medium to high-end
positions

Technology & Innovation

Invest in research & development,

innovation and promote technology
transfer and dissemination in strategic
goods and services that have high local and
regional demand to develop a sustainable
competitive advantage

Capital & Finance

Contracting & Tendering

Business Development

Legislation &
Process Improvements

Enhance financial products in order to

facilitate access, reduce risk and cost of
credit to local investors and companies,
especially for SMEs

Facilitate long term business development

and strong partnerships throughout
the value chain with a focus on SMEs,
local companies and Foreign Direct
Investments (FDIs)

Set up contracting frameworks that

increases local market participation
and opportunities through contract and
procurement processes

Support
business
development
by
continuously improving governmental
and administrative processes and
business related legislation with relevant
stakeholders

In line with the mission and strategy, Cross-Industry Development Initiatives, 53

Supply Chain Development Opportunities and a Local Workforce Development
Programme have been identified based on the gap analysis. Implementation
of the initiatives and opportunities is supported by a Programme Management
Office and a monitoring system.

Delivering the ICV blueprint strategy

Cross-Industry
Development Initiatives
53 initial Supply
Chain Development
Opportunities
Local Workforce
Development
Programme
Program Management
Office (PMO)

Key Performance
Indicators (KPls)

To enhance the overall business environment in Oman covering the six dimensions
defined in the strategy

To expand or launch new industries, activities or products in response to the demand of

the oil and gas industry and generate new jobs

To develop a world-class local workforce required for the oil and gas industry in the
upcoming years (2013 - 2020)
To ensure alignment with the strategy, manage and coordinate initiative and opportunity
implementation and act as a single point of contact for ICV related communication with
internal and external stakeholders
To monitor ICV development progress and results of the implemented
initiatives and opportunities

Development opportunities across

the entire value chain

53

Supply Chain
Development
Opportunities

Analysis of the demand forecast of priority categories and the associated capacity
and capability of the local supply market allowed the identification of 53 Supply
Chain Development Opportunities which are currently imported and identified as
high potential to be carried out in Oman.
They range from the creation, expansion or enhancement of industries,
products or activities, and balanced between the development of raw material,
manufacturing, assembly, blending, fabrication activities and services.
The opportunities are addressed to entrepreneurs, Small and Medium Enterprises
(SME), well-established local companies, or Foreign Direct Investments (FDI).
The opportunities have been prioritized and categorized into periodical waves for
implementation.
The 53 opportunities are not restricted to the direct suppliers and vendors of the
oil and gas companies, they also include opportunities across the industrys value
chain.

For more information about the Supply Chain

Development Opportunities, please visit the ICV website:
www.incountryvalueoman.net

Towards a world-class local

workforce
A dedicated Local Workforce Development Programme has been defined based
on the analysis of the industry demand. The programmes main objective is to
develop the specialized workforce required by the industry for the period of 20132020 in terms of number and with international standards. The programmes will
allow to attend the short-term needs as well as preparing the future generation.
The programme was developed based on the analysis of 228 skills.
Currently the number of Omanis working for the oil and gas industry topped
approximately 22,000 out of a total of 55,000. By 2020, the number of jobs
required by the oil and gas industry would reach 72,704, which forms a significant
opportunity for Omani employment.

Jobs forecast in the oil and gas industry over 2013 2020 (as of April 2013)
80000
4,738

70000
60000

24,868

Job Positions

50000
40000
30000

32,094

20000
10000

11,004

0
2013

2014
Operators

228

Skills assessed

2015

2016

2017

Construction Sector

72,704

2018

Service Providers

Required jobs for

oil and gas industry
activities by 2020

2019

2020
Manufacturing

22,369

Current number of
Omanis in the oil and
gas industry

Increasing Omanisation levels across all sectors

The analysis shows that oil and gas companies the direct workforce of the oil and gas companies has the highest Omanisation
levels, where 5,629 professionals out of 8,991 (63%) are Omanis. It is followed by the service provider workforce, where
Omanis represent 59% of the total service provider workforce. The construction sector is constrained by business challenges
and the availability of human resources. It therefore reached 25% of Omanisation levels (data as of April 2013).
Beyond the analysis of the Omanisation levels, the study demonstrated that 82% of oil and gas industry jobs are provided
by service providers and the construction sector.

Increasing local employment through development the local workforce

Henceforth, the study highlights the importance of focusing on the development of the supply market workforce, while
maintaining and recognizing the current efforts and investments in developing the direct workforce of oil and gas companies.
Acknowledging the importance of expatriates in businesses, especially with regards to the technology transfer and business
viability, the program suggest educating and training 36,020 Omanis, representing mainly the semi-skilled and medium to
high end positions to fulfill the oil and gas industry demand.
Along with the Local Workforce Development Programme, the ICV blueprint strategy highlights the need to align the
education and training curriculum to industry standards, set integrated training programmes to close competency gaps and
define industry standards, among other local workforce development initiatives.
The ICV blueprint strategy also emphasizes the criticality of coordination between stakeholders: government, education
and training entities and sponsors from the private sector.

Number and scope of training skills

17,556 Semi-skilled
7,154 Managerial positions

& engineers

4,390 Technicians
3,622 Unskilled
3,347 Supervisors
3,237 Operators
1,195 Inspectors

Total number
of trainings:
36,020 Omanis

OOCEP

For more information, please visit www.incountryvalueoman.net