SMEs, LCCs entitled to share of $4 bn worth of PDO contracts

Omani Small and Medium Enterprises (SMEs) and Local Community Contractors (LCCs) have been invited to register for subcontracts potentially worth several hundred million dollars that are becoming available as part of a pair of long-term service contracts awarded by Petroleum Development Oman (PDO) earlier this year.

In March, PDO, the country’s biggest producer of oil and gas, signed agreements with leading Omani contractors Arabian Industries Projects (AIP) LLC and Special Technical Services (STS) LLC encompassing the design and execution of more than 200 on-plot projects that will run for nearly 10 years.

Under the contracts, worth a total of around $4 billion over their respective timeframes, Arabian Industries and STS will undertake project delivery and maintenance and integrity work in the North and South of PDO’s concession area.

Importantly, the contracts commit both companies to earmarking at least 10 per cent of the contract value to Omani SMEs (registered with Riyada) in the form of subcontracts.

A further 10 per cent in subcontracts is set aside for LCCs — contracting firms fully owned by Omanis living in the concession areas. In essence, a combined 20 per cent of the value of the two main service contracts has to be mandatorily allocated to SMEs and LCCs, which translates to a minimum $800 million over the 10-year timeframe of the contracts.

At a webinar held on Tuesday, officials representing PDO, STS and Arabian Industries shared details of the bonanza of contracting opportunities that are available to LCCs and SMEs stemming from the two main contracts.

The webinar was hosted by Business Gateways International, which is operating the Joint Supplier Registration System (JSRS) — a single window vendor certification portal introduced by the Ministry of Energy and Minerals.

JSRS certification is a prerequisite for contractors and vendors (local and international) competing for contracts from oil and gas operators in the Sultanate.

Speaking at the online forum, Saif bin Khalfan al Ruzaiqi, PDO, Team Leader, stressed the need for interested LCCs and SMEs to be registered on the JSRS in order to compete for subcontracts that flow from the two main service contracts.

While the main contracts cover the length of PDO’s Block 6 licence, bidders have an advantage when competing for subcontracts involving sites in their geographic proximity, he said, adding however that in principle SMEs and LCCs can bid for any opportunity regardless of their location.

A key underlying objective, Al Ruzaiqi said, is to drive job creation and Omanisation with a focus on skilled jobs, supervisors and engineering positions.

There were also presentations by Abdulrahman al Abri, ICV Manager — PDC South, STS; and Suleiman al Suleimani, MIC — Arabian Projects Industries, who affirmed their respective companies’ commitments to meeting their obligations to SMEs and LCCs under the contracts.

During a Q&A session that followed, officials representing the Ministry of Energy and Minerals and Public Authority for SME Development (Riyada) also fielded queries from the virtual audience.