Talk to anybody working in the Omani oil and gas sector and it’s not long before the question of human resources arises. “The reservoirs here are hugely challenging, so the competency gap is a problem, but it would even be a problem in the US or any other market. We need to work with the government to provide adequate training,” Chokri Ben Amor, the general manager of oilfield services provider Schlumberger Oman, told OBG. The complex reservoir structures associated with the sultanate’s hydrocarbons wealth means that the task of sourcing personnel with appropriate knowledge and skills has always been a difficult one for international oil companies, and will likely remain so.
Hiring and retaining qualified staff has become a costly business in terms of both time and capital, and it is therefore not surprising that both the government and the private sector has already invested significant sums in training Omanis to work at all stages of the hydrocarbons business, from exploration to refining and distribution.
The most visible manifestation of this joint effort is to be found in the grounds of the Muscat headquarters of the state-owned giant Petroleum Development Oman (PDO). The Middle East Learning Hub was constructed there in 2006, and its operation is central to the nation’s status as a producer of hydrocarbons from challenging subsurface formations. The facility, an initiative of Shell Exploration and Production Middle East and run in collaboration with PDO, offers technical development of skills for Shell staff and PDO employees, as well as other Shell joint venture companies in the Middle East, Caspian and South Asia. Using the facility, Shell has been able to develop a permanent base for technical expertise in Oman, offer foundation training for newly hired PDO staff, increase its in-house training portfolio, allow for early exposure to Shell learning and development programmes and increase networking opportunities among regional staff.
Although the Anglo-Dutch group is primarily a shareholder in PDO rather than an operator in Oman, the size and importance of its interest has made enhancing the execution capacity of PDO employees one of its main priorities. “As well as the learning hub, we have about 400 secondees working in PDO.
They usually go in for four years and are directed in particular to the most advanced technological disciplines.
They also train Omanis so that they can take over that capability – there’s a lot of expertise being transferred that way,” Sander Koster, a business development manager at Shell Development Oman, told OBG.
Other international firms have been similarly assiduous in their approach to the skills issue.
Schlumberger, for example, operates a training centre in Abu Dhabi which Omani staff regularly attend, and it also sends recruits to the US and France for further career development. “In some ways, we are a training machine. In 2011 we recruited around 250 people in Oman, and in 2012 it was around 350. Locally, we recruit from wherever we can, Sultan Qaboos University, the German University of Technology, the universities at Nizwa and Salalah, and so on. A lot of the people in the Oman industry are ex-Schlumberger,” said Ben Amor.
The pressure to source and train more local talent not only comes from the industry’s need for skilled personnel, it is also the result of the government’s ambitious Omanisation targets aimed at introducing more nationals into the workforce across a range of sectors. This long-term project has been in operation since 1988 and has played an important part in the gradual replacement of expatriates with suitably trained nationals in the oil and gas industry. Most private firms operating in the sultanate have registered Omanisation plans, and since 1998 a “green card” has been granted to companies that have met Omanisation targets and comply with the eligibility criteria for labour relations. This brings with it palpable rewards: as well as the public relations fillip they receive when their names are published in the local press, companies that have achieved green card status receive preferential treatment in their dealings with ministries.
However, even those oil and gas companies that have succeeded in meeting a sector-wide Omanisation target of 86% face challenges in replicating this further down the supply chain. Regulations governing in-country value (ICV) generation require local contractors used by oil companies to also meet robust Omanisation criteria. Many of these firms, especially those working in construction and maintenance, have traditionally utilised low-cost labour from India and Pakistan. Addressing this issue will be particularly significant given the 2012 announcement that suggested compliance with ICV regulations would in the future be a key parameter in tender evaluations. While few in Oman’s oil industry would take issue with these goals, not all are convinced that a stringent adherence to Omanisation targets represents the most effective way of bringing this about. Under the present system, many industry heads point out, Omani employees that have been sent abroad at company expense to work and gain experience in foreign operations are not taken into account in Omanisation assessments. Some companies have been compelled to recall Omani nationals working outside the country in order to reach their Omanisation targets, a phenomenon that threatens to inhibit the very transfer of knowledge that the policy strives to achieve. “We have around 100 Omanis working outside the country,” said Ben Amor, “and they are important because they add value on their return. I believe they should be counted as double regarding the Omanisation process, as they are being trained and paid for externally and will be the future leaders of the local industry. The current Omanisation target is forcing us to bring these Omanis back into the country, and this isn’t good for the sector.”
Becoming More Flexible
A recent change in the way Oman will go about the business of injecting more nationals into the workforce suggests that the government has understood this risk. In June 2010 the sultanate’s manpower minister endorsed a restructuring of the influential sectoral committees that are charged with overseeing and implementing Omanisation strategies in their respective industries. One of the most salient changes to the 12 committees, one of which is dedicated to the oil and gas industry, is that private sector officials will sit alongside representatives of the General Federation of Labour Unions and state personnel to formulate the strategic detail of recruiting Omanis into the workforce. The new panels will work directly with private firms to meet a set of broad, sector-based Omanisation objectives. While it remains to be seen how the new measures will work in practice, they represent a significant departure from the earlier system that many felt resulted in an erosion of business confidence. Certainly, the formalisation of private sector input at the level of sectoral committees will make for more nuanced policy planning and holds out the promise of a more consensual approach to the development of the country’s human resources.
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