Petroleum Development Oman (PDO), Oman Shell, Oman LNG and the Oman Oil-Orpic Group signed a Memorandum of Understanding (MoU) today (2 September) committing the operators to collaborate on developing a self-sustaining business model for the turnaround activities of oil and gas installations.
A turnaround entails the shutdown of a plant for a period of time for maintenance, refitting and inspection purposes before it is brought back on stream. The activity allows for the validation of the technical integrity of equipment, materials, plants and systems; it also allows for the collection of data, which may assist in reducing the time needed for future turnarounds thereby cutting potential losses from deferred production or unnecessary work.
Turnarounds are fundamental to the safe and efficient operation of an installation but, due to the irregular nature of the requests for such services, companies in Oman carrying them out are currently supported by a range of local, regional or international contractors.
The total workforce for a 20-day turnaround can reach up to 800-900 people with major shutdowns involving 1,200 or more depending on the size and complexity of a plant.
However, it is believed that aggregating the demand from the four oil and gas companies and providing consistent and continuous work will encourage the localisation of turnaround services and increase Omanisation levels.
The five-year MoU was signed during the World Heavy Oil Congress and Exhibition held under the auspices of His Excellency Eng. Salim bin Nasser Al Aufi, Undersecretary of the Ministry of Oil and Gas, at the Oman Convention and Exhibition Centre.
PDO Managing Director Raoul Restucci said: “The Turnaround project is a great example of key operators, covering the full spectrum of up/mid and downstream operations in the Oman oil and gas industry, working collaboratively together to deliver In-Country Value.
“The project will deliver key and fundamental skills and services in Oman by Omanis. By integrating and synchronising our major facility shutdown and maintenance plans, we have secured the scale, scope and continuity of work that will enable us all to develop and deploy Omani talent in a cost-effective and sustainable manner within and beyond our industry.”
A joint working group and a taskforce have been established to build alignment, develop its scope and set future actions. The ultimate goal is to increase Omanisation in the Turnaround Execution Workforce (“TEW”), with potential for future expansion in other activities based upon the success of the new initiative.
Commenting on the launch of the scheme, Walid Hadi, Vice President of Oman Shell, stated: “We are honoured to collaborate with PDO, the Oman Oil – Orpic Group, Oman LNG and the local turnaround companies in the creation of a turnaround business model with a significantly Omanised workforce.
“The philosophy of "demand aggregation" across the operators to create a sustainable business model for Omani companies will be a significant game-changer and we hope to collaborate with our partners in creating other supply chain opportunities. This comes in line with Oman Shell’s commitment to creating more value in the Sultanate and putting Oman first in all our business endeavours.”
Head of Procurement Contracts and Inventory at the Oman Oil and Orpic Group Ahmed Al Azkawi said: “Demand aggregation among operators marks the beginning of strong collaboration in the oil and gas sector to create sustainable opportunities for contractors to increase their Omanisation rates and ICV content. Through this collaboration, we also hope to replicate demand aggregation in other areas to create more ICV opportunities.”
Speaking after the signing ceremony, Harib Al Kitani, CEO Oman LNG, said: “We are delighted to partner with our industry peers for the benefit of our beloved country. Such synergy in turnaround activities does not only supports the national economy by sustaining this service in country, but also develops Omani talent to deliver very specialised and complex jobs in this vibrant industry. “Oman LNG has and will strive to be one of the leading contributors to the success of in-country value (ICV) in the Sultanate, through innovation, providing opportunities and consistently monitoring our suppliers and service providers to ensure that SMEs are given the top priority by all.”