Expanding oil services companies reach out to GCC partners

Petrofac is seeking an edge on rivals through local investment. (Supplied)
Updated 07 September 2018
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Expanding oil services companies reach out to GCC partners

  • Petrofac has made it clear that having a social license to operate — shorthand for supporting local economies — was a critical factor that determined whether it won tenders or not
  • Petrofac CEO Ayman Asfari: The delivery of in-country value, or ICV, is becoming increasingly important. The established national oil companies are prioritizing ICV

LONDON: Oil services and equipment companies are courting GCC partners to bolster local job creation and investment as they seek an edge on competitors to secure new business in the region.
The oil price recovery means there are more opportunities in the oil and gas sector after years of stagnation, although the KSA market has been relatively strong.
Petrofac, the oil services company with a growing reach in the Middle East, has made it clear that having a social license to operate — shorthand for supporting local economies — was a critical factor that determined whether it won tenders or not.
Petrofac CEO Ayman Asfari told Arab News: “The delivery of in-country value, or ICV, is becoming increasingly important. The established national oil companies are prioritizing ICV. In Abu Dhabi, for example, the tendering process now fully embeds ICV. It means that companies with the highest ICV have almost the right of first refusal on business.”
Active training and a development program of local talent are needed, he said.

 

ICV was a key focus area in Saudi Arabia. “More than 20 percent of our employees on the Fadhili project are Saudi nationals and our total local content across all our Saudi projects, including procurement, is expected to peak at more than 50 percent later this year,” said Asfari.
“On the question of the ICV, the in-country value, it’s really a license to operate now. It’s a requirement by clients increasingly. And unless you can meet that requirement, you will not be able to do business,” he added.
Elsewhere, London-listed Lamprell, based in the UAE, is looking to qualify as a contractor to Saudi Aramco under which contractors take up offshore engineering, procurement and construction and projects in the oil and gas sector.
An important aspect of this process is the Kingdom’s Total Value Add (IKTVA) program, which is intended to boost local investment and meet Vision 2030 objectives.
Lamprell strategy is to set up a Saudi limited liability company with KSA’s Asyad Holdings as a local partner.
Equipment and engineering services company Sparrows Group has recently been granted commercial registration to operate in KSA after it created a local JV.
Sparrows said: “A locally established company with the relevant commercial registration is a major requirement. The IKTVA program is sponsored by Saudi Aramco and is designed to drive increased investment, economic diversification, job creation and workforce development within the Kingdom.”

Decoder

The oil price recovery means there are more opportunities in the oil and gas sector after years of stagnation, though the KSA market has been relatively strong.


American Airlines ‘unaware’ of some Boeing 737 MAX functions until last week

Updated 15 November 2018
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American Airlines ‘unaware’ of some Boeing 737 MAX functions until last week

  • The FAA and Boeing are evaluating the need for software or design changes to 737 MAX jets
  • ‘Safety remains our top priority and is a core value for everyone at Boeing’

WASHINGTON: American Airlines Group Inc. said on Wednesday it was “unaware” of some functions of an anti-stall system on Boeing Co’s 737 MAX until last week.
Boeing and the US Federal Aviation Administration (FAA) issued guidance on the system last week after a Lion Air jet crashed in Indonesia on Oct. 29, killing all 189 people on board.
The FAA warned airlines last week that erroneous inputs from the system’s sensors could lead the jet to automatically pitch its nose down even when autopilot is turned off, making it difficult for pilots to control.
The system was designed to prevent the jet from stalling, according to information provided by Boeing to airlines.
“We value our partnership with Boeing, but were unaware of some of the functionality of the Maneuvering Characteristics Augmentation System (MCAS) installed on the MAX 8,” an American Airlines spokesman said.
“We must ensure that our pilots are fully trained on procedures and understand key systems on the aircraft they fly.”
Indonesian investigators said on Monday the situation the crew of a doomed Lion Air jet was believed to have faced was not contained in the aircraft’s flight manual. US pilot unions were also not aware of potential risks, pilot unions said.
The FAA and Boeing are evaluating the need for software or design changes to 737 MAX jets in the wake of the Lion Air crash, the regulator said on Tuesday.
The American Airlines spokesman said his airline was continuing to work with Boeing and the FAA and would keep pilots informed of any updates.
A Boeing spokeswoman said the manufacturer could not discuss specifics of an ongoing investigation but it had provided two updates for operators around the world that re-emphasize existing procedures to deal with situations relating to MCAS.
“We are confident in the safety of the 737 MAX,” she said. “Safety remains our top priority and is a core value for everyone at Boeing.”