A year that began with a quiet focus on strengthening professional standards and industry benchmarks soon morphed into a full-blown crisis management campaign as the economic recession, compounded by the Covid19 pandemic, threatened to shake the Sultanate’s energy industry. OPAL’s relatively small but highly motivated office team found itself on a war-footing as the sector braced for a tidal wave of lockdowns, layoffs, bankruptcies and other challenges thrown up by pandemic-related lockdown measures. Although a veteran of multiple oil price shocks of recent decades, OPAL was faced with a crisis the likes of which the industry, and indeed the wider world, was countenancing for the first time. In his first full-fledged interview since his appointment as CEO earlier this year, Abdulrahman al Yahyaei spoke candidly to Energy Oman about OPAL’s about its successes, and some disappointments as well, in helping the industry to weather the crisis.
“It was quite unlike anything that Oman has faced in the past five decades,” the CEO said. “What began as a recession last year triggered by the collapse in international oil prices was suddenly worsened by the coronavirus outbreak. The consequences were not only bad for the energy sector, but for the economy as a whole.”
He continued: “But unlike crises of this nature, where you could pump in money, incentivise projects or boost liquidity, here was a situation that warranted a slowdown in economic activity in order to control the spread of the virus. Thus, combined with the curtailment of oil production in keeping with Oman’s commitment to the Opec+ grouping, oilfield activities began to decline with consequences for contractors and service providers, among others.”
As the sector’s sole representative organisation that connects all stakeholders with the government, OPAL found itself playing a stellar role in its outreach to members severely impacted by the crisis. From the outset of the pandemic, it was the industry’s ‘go-to’ source for professional guidance, dispute resolution and other advice on issues of contention raked up by the crisis.
Among its foremost responsibilities was a mission to stave off large-scale layoffs of Omani oilfield workers as the economic slump, aggravated by the lockdown measures, sparked a spree a cost-cutting and downsizing across the sector. OPAL, as the industry’s reference point, was invited to participate and contribute in the highly-respected ‘Laid-Off Committee’ constituted by the Ministry of Labour to curb unjustifiable terminations of Omani workers. Also the committee comprised high calibre representatives from the Ministry of Finance, Ministry of Commerce, Industry and Investment Promotion, Oman Chamber of Commerce and Industry (OCCI), and the General Federation of Worker Trade Unions.
“It was a challenging time for our members and others, as well,” said Mr. Al Yahyaei. “Many companies were experiencing severe financial distress as revenues began to dry up because of the lockdown, while they continued to incur fixed costs in the form of staff salaries, rent, and so. Some businesses were on the verge of declaring bankruptcy, but the decisions of the Supreme Committee gave them some space to mitigate their losses by negotiating salary cuts with their workers or laying off some of the expatriate staff temporarily.”
Thanks to OPAL’s proactive and effective intervention, companies and businesses held off from laying off an estimated 25,000 Omanis, according to the CEO. “We held oneon-one meetings with management officials of more than 286 companies at the height of the crisis, offering them a clear interpretation of the Supreme Committee’s guidelines on salary cuts and layoffs. We also hosted a series of virtual workshops in collaboration with the prominent Omani law firm Said Al Shahry & Partners to advise our members on the application of the Omani Labour Law and the Supreme Committee’s guidelines. The ultimate goal was to safeguard the jobs of Omani oilfield staff while balancing this objective with the concerns of their employers.”
However, despite the best efforts of OPAL and the authorities, several hundred jobs were ultimately lost, admits Mr. Al Yahyaei. “These were employees of international or local companies that were winding down their operations in Oman because of the decline in oilfield activities or had completed their projects and not having any new contracts. There was little that could be done to salvage their situation. But the great majority of oilfield companies and service providers heeded OPAL’s appeal to retain their workers despite the odds, and we are grateful to them. They stood by the government in the country’s difficult time.”
While manpower-related challenges were OPAL’s predominant preoccupation during the crisis, it also made time to address HSE related concerns. The Society’s HSE Committee met weekly to assess adherence to COVID-19 related safety measures, including ‘work-from-home’ guidelines, returning to the office guidelines and social distancing. More than 260 videos and posts were also circulated during this period to strengthen pandemic-related safety awareness.
Besides, with lockdown measures hampering the smooth flow of equipment and supplies into the oilfield areas, OPAL also stepped in to facilitate the movement of critical goods and authorised personnel at checkpoints set up between governorates. Following an understanding reached with with resultant consequences for oilfield operations.
“Imagine the consequences if one infected person transmits the virus not only to his colleagues but also the replacement batch during the handover part of a rotation! In such a scenario, the entire operations come to a standstill until a fresh complement can be mobilised. But with the new 28-day schedule, the risk is significantly lower, which is beneficial not only to the contractors but the industry as well.”