Muscat: Oman Oil Refineries and Petroleum Industries Company (Orpic) is offering ample business opportunities for local companies as part of its In-Country Value (ICV) initiative.
These business opportunities are in the form of material supply, sub-contracting work, supporting services and Omanisation.
Local small and medium enterprises are expected to immensely benefit from the business opportunities (which include sub-contracting works, purchase orders, and support services like catering and cleaning) available from major contracting firms. Addressing a panel discussion at the Oman Downstream Conference, Dr. Hilal Abdullah Mohammed Al Hinai, general manager, corporate support services, Orpic, said the estimated value of ICV at its $6.4 billion-Liwa Plastics Industries Complex is around $1.5 billion.
These are mainly for services from local suppliers ($994 million), sub-contracting work ($191 million), products from Omani companies ($147 million) and Omanisation.The prestigious Liwa Plastics Industries Complex is being built by the state-owned Oman Refineries and Petroleum Industries Company.
Orpic has already awarded four major packages to multinational contracting firms for building Liwa Plastics Industries. 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. Contractors of these projects have agreed to comply with the ICV stipulation.
Al Hinai said that out of the total project cost of $380 million for the Muscat-Sohar Product Pipeline, local companies have received $230 million. Further, of the $2.7 billion capital expenditure for the Sohar Refinery Improvement Project, the ICV component was $800 million, which included a supply of pipes and cables from Omani companies. “We have managed to save some of the local companies (by purchasing their products),” added Al Hinai.
“There is a huge opportunity due to Liwa Plastics Industries. Also, these industries are bringing opportunities for logistics firms and software companies.”
Talking about the immense benefit to local community in Sohar, he said that apart from direct employment, there are a lot of opportunities for indirect employment generated by sub-contracting firms.
Referring to the challenges faced by small and medium enterprises in getting business, he said that sustainability of these firms is a major challenge.
Another challenge for local SMEs is their difficulty in participating in the bidding process since it is a complex process and tender documents are lengthy.
However, Orpichas ring-fenced some of the tenders only for SMEs, besides considering extending contracts for two to three years.
Orpic’s ICV team is also helping the small enterprises to get new business.