Contracting and Procurement Business Practices


Oman LNG operates on the following principles:

Partnership

Oman LNG contracts out provision of goods and services where added-to-business value exists and best possible commercial terms can be achieved. Oman LNG always considers long-term business relationships ("partnerships") with contractors and suppliers, particularly in important and strategic areas.         

Transparency and Fairness

Oman LNG believes that trust is a critical element of business relationships. Hence, procurement and contracting process is governed by policies and procedures that aim to ensure constant existence of transparency and fairness. Every supply agreement or contract is thoroughly assessed for consistency, integrity and clarity to minimize any misunderstandings or disputes during implementation or execution.

Best for the country and company

To create opportunities within Oman, Oman LNG contracting and procurement policy mandates having competitive tendering (if circumstances permit) and procuring goods and services from Omani companies – if it is technically and commercially viable.

Omanisation

Oman LNG fully supports and looks for ways to build on the Omanisation Policy of the Government of the Sultanate of Oman. All contracts shall contain specific requirements for Omanisation.

OPAL

Oman LNG continuously strives and looks for new ways to support Omanisation by having specific requirements in its supply agreements and contracts. In addition, Oman LNG has a membership in Oman Society for Petroleum Services (OPAL), and it requires Omani local and national contractors and suppliers to apply for OPAL’s Compliance Verification Certification (OPAL CVC). Further details on OPAL can be found inwww.opaloman.org

In-Country Value (ICV)

The Ministry of Oil and Gas formed In-Country Value (ICV) Committee as genuine initiative to develop ICV content in Oman and raise opportunities while coordinating the efforts of the industry. To achieve its aspirations of contributing in a sustainable manner to ICV objectives, Oman LNG has engaged with the Ministry of Oil and Gas, a number of Oil and Gas Companies in Oman, Oman Society for Petroleum Services (OPAL), Suppliers and Contractors, and Local Communities in various ways. Furthermore, Oman LNG has become a member of Oil and Gas ICV Committee and its relevant sub-committees, namely C&P Managers ICV Forum and HR Forum. Via these committees, Oman LNG has managed to share information with other members and discuss challenges, opportunities and innovations in realization of ICV objectives.

The immediate initiatives taken were categorization of certain contracts solely for Omani or locality-based companies. In quarter one of 2012, Oman LNG was obtaining 100% of both its plant and building maintenance and building services from Omani companies. During the same period, Oman LNG was also obtaining 56% and 93% of its plant and operations services respectively from Omani companies. This translates to approximately 98% of expenditure on services going to Omani companies. In addition, Oman LNG has floated a number of major tenders as pilots and, have evaluated them and factored the ICV content into its decision to award those tenders.

Oman LNG understands the challenges ahead and keeps regularly reviewing its ICV plan to ensure alignment with Oil and Gas industry and successful contribution to:

ICV Blueprint Development, which aims at developing a strategy and a roadmap to enhance the ICV contribution made by the Oil and Gas industry to the economy of Sultanate of Oman;

ICV Evaluation Criteria Development for contracts, which will set a standard mechanism on how ICV can be measured at Oil and Gas Industry level; and

Joint Suppliers Qualification System for the Oil and Gas Industry to standardize the selection criteria for potential tenderers.