Orpic offers $400m worth of contracts to small units

Business Monday 28/November/2016 18:20 PM
By: Times News Service
Orpic offers $400m worth of contracts to small units

Muscat: State-owned Oman Oil Refineries and Petroleum Industries Company (Orpic) is offering business opportunities worth of $400 million for small and medium enterprises (SMEs) for developing its $6.5 billion-Liwa Plastics Industries Complex.
These business opportunities, including sub-contracting works, will be awarded by four main contractors who have won these packages as part of in-country value (ICV) obligation.
Orpic has already awarded four major packages to multinational contracting firms for building Liwa Plastics Industries Complex with a total cost of $4.5 billion.
“There is an in-country value obligation in the contract with EPC contractors. These are in four categories, including purchase of local materials and service, which has to be a minimum of 25 per cent,” said Ibrahim Al Maamari, ICV manager at Orpic. “We are expecting to reach around 30-35 per cent ICV.” He was talking to the media on the sidelines of a three-day SME exhibition, which opened on Monday at the new Oman International Exhibition Centre.
Local small and medium enterprises are expected to immensely benefit from the business opportunities (which include sub-contracting works, purchase orders, and support services) available from major contracting firms.
Among the four packages, a joint venture of CB&I and CTCI Corporation joint venture was awarded a contract for a steam cracker and utilities, Italy’s Tecnimont won a contract for plastics units, a consortium of South Korea’s GS Engineering and Construction and Japan’s Mitsui & Co won a contract for natural gas liquids extraction facilities and India’s Punj Lloyd bagged a contract for building a pipeline between Fahud and Sohar.
“The value of the first EPC package is $2.8 billion and a 10 per cent of this contract (equivalent to $280 million) will be available for SMEs. The same will be applied to the remaining three packages. We are talking about businesses worth of $400 million for SMEs,” added Al Maamari.
He said that Orpic has been conducting inter-active workshops betweenthe main contractors and potential small and medium enterprises to help small units to get business from these projects. Several contract opportunities are available for small units, which include site preparation, transport, information technology, electrical and mechanical work and construction opportunities.
However, he noted that small and medium enterprises are facing difficulties in grabbing these opportunities. The main contracting firms prefer to award sub-contracts to those small companies who can deliver it on time. “We have to bridge the gap between SME capabilities and the market requirement.”
Liwa Plastics Industries Complex is one of the strategic growth projects being undertaken by Orpic as part of its transformational journey. The $6.5 billion project, which is scheduled for commissioning in 2020, will transform Orpic’s product mix and business model, double company profit, create new business opportunities, generate significant employment opportunities and support the development of a downstream plastics industry in Oman.