MUSCAT: Wholly Omani-government owned Energy Development Oman (EDO) has announced the signing of a Memorandum of Understanding (MoU) with Sumitomo Corporation Middle East to explore the localisation of Oil Country Tubular Goods (OCTG) manufacturing in the Sultanate of Oman.
OCTGs are pipes and casings used in oil and gas drilling and production operations. Oman’s requirement of OCTGs – across its portfolio of upstream oil and gas operators – is estimated to run into several hundred million dollars per annum, underscoring the pivotal importance of OCTGs in sustaining hydrocarbon activities in the country.
EDO, by virtue of its 60 per cent ownership of oil resources and 100 per cent non-associated gas resources in Block 6 operated by Petroleum Development Oman (PDO), is the largest consumer of OCTGs in Oman by far.
On Sunday, the energy company joined a number of public and private sector entities in the signing of agreements committing to support initiatives to advance the localisation of goods manufacturing across a number of key sectors. The event, hosted by the Ministry of Labour and the General Secretariat of the Tender Board, marked the culmination of a months-long National Local Content Laboratory that yielded as many as 58 opportunities for local content development across multiple segments of the economy.
EDO’s MoU with Sumitomo Corporation was one of two pacts inked by the state energy firm on the occasion. It also initialed an agreement with Port of Duqm Company centring on the development of an energy supply and logistics hub in Duqm designed to improve supply chain efficiencies and support the growth of Oman’s energy sector.
Announcing the pacts in a post, EDO stated: “Proud to announce signing two Memorandums of Understanding (MoUs) as part of our continuous efforts towards advancing Oman’s energy supply chain, supporting local industries, and contributing to the national economic diversification targets as part of Oman Vision 2040.”
As for its MoU with Sumitomo Corporation ME, it said the pact will “enable us to explore the establishment of an Oil Country Tubular Goods (OCTG) manufacturing facility in Oman. This initiative aims to strengthen local manufacturing capabilities and reduce reliance on imports,” it added.
“These agreements are part of EDO’s broader vision to develop a self-sustaining, resilient energy ecosystem in Oman; one that not only meets domestic needs but also positions Oman as a regional leader in sustainable energy development,” Muscat-based EDO further noted.
Significantly, Sumitomo Corporation Middle East (SCME) is a longstanding supplier of OCTGs to Petroleum Development Oman (PDO). The supply arrangement began in 2003 when parent company Sumitomo Corporation, together with Nippon Steel & Sumitomo Metal Corporation (NSSMC), signed deals to provide high quality tubular goods to PDO, the largest producer of hydrocarbons in Oman. A specialized storage area for OCTGs has since been established in Port of Duqm’s logistics zone as part of a ‘Mill to Well’ model designed to optimize supply chain efficiencies linked to the supply of these pipes to PDO.
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