PDO to deduct 1.2 per cent of contract value to fund job creation

MUSCAT, DEC 24 – Majority government-owned oil and gas producer Petroleum Development Oman (PDO) has revealed that a levy, amounting to 1.2 per cent of the value of every contract awarded by the company to contractors and vendors, is helping creating employment and training opportunities for Omanis. The levy applies to contracts raised after April 1, 2016, as well as request-for-quote purchase orders — an initiative stemming from the slump in international oil prices, the company stated in its monthly newsletter ‘Al Fahal’.
“The initiative means that contractors and vendors are now mandated to contribute 1.2 per cent of the gross invoiced value to the fund to sustain job creation and training support for Omanis in the oil and gas industry and beyond,” the company said, adding that the deduction occurs during the invoice processing stage.
Significantly, the 1.2 per cent deduction from the value of every contract will help fund PDO’s flagship National Objectives Programme — an initiative launched in 2011 in response to His Majesty’s call for the creation of jobs for Omani nationals. The programme has created as many as 35,000 employment and training opportunities across the Oil & Gas industry in Oman, according to PDO.
Exempted from the levy are contracts with government entities, ministries and public authorities. So too are company shareholders (such as the government, Shell, Total, Partex, and so on), and non-government organisations such as the Oman Society of Petroleum Services (OPAL). Real estate rental contracts also do not come within the purview of the measure.
Recently, the deduction process was automated by PDO, paving the way for the smooth, transparent and efficient management of the initiative, the company said.  Contract engineers at the company have also been tasked with ensuring that their contracts – as well as variations to contracts – include “provisions for a 1.2 per contribution at all stages of tendering and to ensure that their contractors and vendors are aware of this 1.2 per cent contribution”.

Conrad Prabhu