Wherever the Company operates, we’re committed to employing local people, working with local suppliers and developing local capabilities.
As well as being the right thing to do, we see this as a source of competitive advantage, helping us to keep costs down, improve the quality and availability of local suppliers, and build stronger relationships with local stakeholders.
In this way, we aim to make a positive and measurable contribution to the economies in which we operate.
The foundations needed to deliver in-country value
In this video, our Group Chief Executive, Ayman Asfari explains the foundations needed to deliver in-country value, and why that’s resulting in a differentiated position for Petrofac in the market.
The concept of in-country value (ICV) seeks to formalise and quantify the net contribution Petrofac makes to the economies in which we operate.
Across many of our projects we have started to evaluate our impact. We’re also becoming more consistent in the way we set and monitor ICV targets, and share the lessons learned across the Group. We’re also providing increased support to our supply chain through our training and project engagement initiatives.
In 2017, we purchased more than US$1.2 billion worth of goods and services across our key MENA projects. The proportion of locally sourced goods and services increased from 33% in 2016 to 50% in 2017.
For various reasons, including the size of the country and the capability of the local supply chain, the level of procurement that comes from locally registered vendors varies. For example:
We continue to work towards gathering consistent data to report on the level and nature of employment on our key sites. Our aim is to understand the total number of jobs created, as well as the ratio between local and expatriate workers.
In 2017, we supported over 75,000 jobs at our key MENA projects. Around 95% of these were through our subcontractors, the remainder being a mix of expatriate and local Petrofac employees and contractors.
The extent to which subcontractor jobs are held by locals or expatriates is determined partly by local content requirements and partly by the availability of qualified candidates. In some countries, such as Algeria, the percentage of local subcontractor workers can exceed 85%. In others, such as Saudi Arabia, it can fall below 10%.
85% of our in-country value investment has been spent through local goods and service providers
We've placed orders with more than 650 Saudi suppliers for goods and services