- Over USD 280 Million in Quick Wins ‘Cost Savings and Revenue Uplift’
- USD 28 Billion Investment in Growth Projects Planned
Muscat, Oman: – Under the patronage of H.E. Dr. Mohammed bin Hamed Al Rumhi, Oman’s Minister of Oil and Gas, and Chairman of its Board of Directors, Oman Oil and Orpic Group announced the culmination of a year of integrating nine core businesses under a new brand identity called ‘OQ’. Reflecting the motion of energy and the colours of courage and compassion, the new brand brings together the legacy of these companies in one voice and as one community to unlock a prosperous and integrated future for the nation and its people. The letter ‘O’ stands for Oman and opportunity while the letter ‘Q’ pays tribute to His Majesty Sultan Qaboos bin Said for providing the wisdom and bold leadership behind the success of a modern Oman. It also represents quality and the company’s essence of questioning the norms on its quest to pursue a new and exciting tomorrow.
Kickstarted in December 2018, an experienced Integration Leadership Team (ILT) led by Group CEO Musab Al Mahruqi, embarked on an integration programme, code-named Nakhla, which has already generated over USD 280 Mllion in Quick Wins, translating to cost savings and revenue uplift in 2019.
Aiming to become enablers of a bolder future, challengers of the status quo and game changers, the company has set clear aspirations towards 2030. These aspirations will be achieved by combining its talent and hydrocarbon resources to better serve its customers, all the while increasing its contributions to shareholders and the nation.
“We have set a clear roadmap for a brighter future. By 2030, we plan to grow our total oil equivalent (boe) managed by the Group from 655,000 barrels per day to 1 million per day, and drive a USD 25 increase in value per barrel, in turn doubling our current GDP contribution of USD 10 Billion to USD 20 Billion. As a catalyst for change, the new integrated company will also facilitate foreign direct investment and private-sector participation in the energy sector,” Al Mahruqi said.
Today, the new company offers more than 30 products sold to over 2000 customers in 60-plus countries worldwide. Recording a solid 2019 performance, the company’s estimated revenue was USD 20 Billion, EBITDA USD 2.2 Billion and Net Profit of USD 556 Million, while the asset base stands today at USD 27.9 Billion.
The nine integrating companies are Oman Oil Company; Orpic; Oman Oil Company Exploration and Production; Oman Gas Company; Duqm Refinery; Salalah Methanol Company; Oman Trading International; OXEA; and Salalah Liquified Petroleum Gas. As part of the integration process, the company is re-organising itself across four functions – Commercial, Finance and Strategy, People and Culture and Projects and Technology – and two business lines – Upstream and Downstream. At the centre of the integration are 5,800 talented people nurtured and developed to thrive in competitive global markets. These talents will be primarily recruited from within the organisation to fill the positions offered by the new structure.
Looking to develop an integrated hydrocarbon value chain, the company has set plans to invest USD 28 Billion in future growth projects of which USD 18 Billion has been earmarked for Duqm Refinery and the future Duqm Petrochemicals projects. The company also aims to tap into new business lines including alternative energy, gas management and retail. With planned investments, the company’s downstream production will increase from its current 15 Million tonnes to 24 Million tonnes by 2030, while the commodity sales volumes will double from 21 Million tonnes to 40 million tonnes by 2030. At the same time, the company’s upstream production, including both operated concessions and joint ventures, will rise from its present 150,000 boe/day to 245,000 boe/day by 2030.
The ILT team also emphasised that cultural transformation is fundamental for the company’s integration to be successful. The company has therefore adopted a unique bottom-up approach, focused on co-creation. As a result, more than 100 workshops and townhall sessions were organised to engage employees, who have been critical in identifying value creation opportunities. To date, employees provided more than 800 ideas that resulted in over USD 280 Million cost savings and revenue uplift in 2019. In addition, online and offline platforms were created to ensure continuous idea generation and sharing of feedback across all levels of the organisation, building a company everyone aspires to work for.
Upon completion, the integration will help the company achieve a number of long-term benefits including navigating changes in the oil industry, supporting the overall business by reducing silo-based behaviour and decision-making, creating jobs and developing people, hedging and diversification, increasing purchasing power, financing projects, exploiting synergies, and strengthening Oman’s overall position and global competitiveness. As the global energy industry evolves, such a transformation is necessary to sustainably generate greater economic, social, and environmental value and build an energy sector that is fit for the future.
Our strategic integration journey will form one of the Sultanate’s largest integrated energy companies. In line with the country’s forward-thinking strategy to nurture a more sustainable and diversified economy, OQ will position itself amongst global hydrocarbon players by capitalising on opportunities across the value chain, while simultaneously building an environment where talent thrives.
Ensuring a seamless and robust transformation, an integration programme called Nakhla was launched in December 2018 to spearhead the formation of OQ from nine core companies, namely Orpic; Oman Oil Company, Oman Oil Company Exploration and Production; Oman Gas Company; Duqm Refinery; Salalah Methanol Company; Oman Trading International; OXEA and Salalah Liquified Petroleum Gas. Today, OQ focuses on facilitating local and international private participation in the oil and gas sectors to increase value for shareholders and reap greater benefits for the nation.
For more information please contact:
Senior Media Relations Specialist
Telephone: +968 24 649-099
Mobile: +968 94558787
© Press Release 2019