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PDO signs $4bn contracts on Block 6

PDO has signed contracts worth $4bn with AIP and STS, with major commitments on local content for work in Block 6.
PDO signs contracts with STS and AIP

Petroleum Development Oman (PDO) has signed service contracts worth $4 billion, the company said.

These will cover project delivery and maintenance in Block 6’s north and south.

The deals were signed with Arabian Industries Projects (AIP) and Special Technical Services (STS). They cover design and execution of more than 200 projects and will run for seven years. There is also an option for a three-year extension.

The companies signed the agreements at PDO’s Mina al Fahal headquarters. Present were PDO’s managing director Raoul Restucci, AIP’s CEO Sadiq Sulaiman and STS’ CEO Rejeesh Mani.

Restucci was quoted as saying the deals were a “win-win” for PDO, contractors and Oman. The agreements “maximise capital efficiency, generate multi-million-dollar savings and enhance In-Country Value (ICV) opportunities.

“They represent a benchmark of best practice by capturing the lessons learned over the past 17 years from engineering, maintenance, and construction contracts across our concession area.

“We expect to transition seamlessly from our existing on-plot deals in the coming months, working hand-in-hand with AIP and STS to deliver a large portfolio of projects safely, responsibly, and efficiently,” he said.

Omanisation

PDO said the contracts would see the level of local content double over their life cycles. This will create “several thousand additional employment opportunities for Omanis, with a focus on skilled jobs, supervisors and engineering positions”.

It announced the launch of a training for employment scheme. This will cover training and upskilling for more than 1,000 Omani workers. Around 1,500 Omani employees from PDO’s contractors will transfer to the new contractors.

There will be specific targets for local sub-contractors and small and medium enterprises (SMEs). The deal also requires a strategy to develop a domestic company to carry out maintenance and integrity tasks within PDO’s portfolio within five years.

AIP will carry out project delivery in the north of Block 6 and maintenance and integrity work in the south. STS will focus on project delivery in the south and maintenance and integrity in the north, a statement said. Block 6 holds the majority of Oman’s oil.

Earlier this week, PDO reported it – and Oman LNG, OQ and the Oman Society for Petroleum Services (OPAL) – had come together to increase in-country value. The four signed an agreement on turnaround and maintenance work to explore the local market and the feasibility of the plans.

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