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Shell encourages local company partnerships
Source: BI-ME , Author: Posted by BI-ME staff
Posted: Thu May 31, 2012 8:01 pm

INTERNATIONAL. Speaking at the UK Trade & Investment “Opportunities in Oman & Iraq” summit on 28th & 29th May in Manchester, England, Mr. Mark Carne Shell’s Middle East & North Africa Executive Vice President stated that Shell always promotes local partnerships in countries where we operate. "It is simply good for business," he said.

His comments echoed the spirit of the Shell-sponsored event which brought together a delegation of local contractors from Iraq and Oman to meet with international service providers based in the UK.

“The goal is to foster partnerships to provide employment and economic development at both ends of the spectrum”, says Mr. Carne. He added that “the idea of local content development is not new to Shell – rather it’s something which started quite early on in a number of our global operations.”

Citing a winning example, Shell-run companies in Nigeria awarded contracts worth more than US$900 million to local Nigerian companies in 2008. This represented more than 90% of the overall number of contracts in the country. 

Encouraging local content makes even more sense in locations such as Shell’s Majnoon oil field in Iraq - where a young population and historically high unemployment rate exist.  The Oil and Gas industry is one of the largest employers in the region, but requires skilled labor and contractors capable of satisfying stringent health, safety and environment (HSE) measures. 

At present 1400 Iraqi contractors are employed to work on Shell’s Majnoon project, while US$ 56 million worth of contracts were awarded by Shell to local companies in the first quarter of 2012 alone. Shell worked closely with these Iraqi contractors prior to awarding their contracts and conducted extensive training to upgrade their skills in order to meet HSE requirements.

In Oman, Petroleum Development Oman (PDO), a Shell joint-venture, recently awarded a single source US$ 38 million pipeline contract to a local company and is providing skill training to more than 400 workmen on welding, scaffolding, electrical and mechanical maintenance. “The decision was deliberately made to award the contract to an Omani company in order to transfer knowledge to the local population and benefit the community in the long-run”, adds Mr. Carne.

Shell recently signed a 4 year partnership with the United Nation Development Programme (UNDP) to support Small, Medium Enterprise (SME) development and provide vocational training in Basrah. “Many of the skills which community members have learnt in places like Iraq are passed down from one generation to the next – by training a generation of skilled labor, we hope to cascade new learning for many years to come” says Mr. Simbi Wabote, Shell’s Global Local Content Manager.

The event in Manchester brought together almost 200 delegates from over 100 companies to promote and facilitate long-term partnerships between British, Omani and Iraqi companies in the energy industry. In general, a large number of local companies from Iraq and Oman face difficulty in resources and technical capabilities to provide services that meet Shell standards. By giving them an opportunity to work with international service providers both companies stand to gain new insight into project best practises, specifically in technical knowledge sharing and on-ground know how.

Equally, UK companies are keen to establish a presence in new markets such as Iraq says Mr. Edward Hobart, the British Embassy’s Deputy Head of Mission in Abu Dhabi. He adds that there is a “rich history of British enterprise in Iraq and with investment increasing year on year, driven by the country’s Five Year National Development Plan for 2010-2014, an estimated US$ 186 billion worth of projects will become available – the majority of which will be in Oil & Gas.”

In addition to the UKTI and Shell, the event was supported by the Energy Industries Council (EIC) a leading trade association for UK companies supplying goods and services to the energy industries worldwide.  The two-day summit covered a market overview of both countries, Shell’s involvement in active projects as well as details of the products and services they are seeking to source.



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