The support of local economies has always been important to Petrofac.
Wherever the Company operates, we are 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.
|- Develop and deliver project- specific ICV plans linked to national ICV priorities
- Deepen our analysis down the value chain to track and enhance the retained value
|- ICV plans and initiatives linked to national priorities were developed for our new projects in Algeria and Thailand
- Existing ICV programmes were enhanced, delivering an increase of 10% in retained value to 41% (US$570 million) of project spend (non-joint venture projects where we have direct control over the supply chain)
|ICV programmes in place in all main countries, including localisation plans to target the recruitment of country managers, local training and capacity building, and a progressive year-on-year increase in retained value|
|Support the Oman Ministry of Commerce Small and Medium Enterprises (SME) programme through capacity building to enhance local SME input on our projects||- We launched a technical assistance programme for SMEs and established links with 35 companies, building local capacity by matching suppliers with project opportunities
- Project SME improvement programmes were put in place covering five key delivery areas:
• manufacturing improvements
• right first time
• non-conformance management
• procurement and logistics
• resources and training
- We included target objectives for Omani SME development in all new contract scopes of major third parties engaged
|- We plan to support further supply chain engagement events connecting SMEs with main project subcontractors/ suppliers to facilitate successful partnerships, scope delivery and SME development
- Progress training and development of local Omani engineering SMEs in Petrofac systems, procedures and optimised engineering processes
|Further enhance our IKTVA programme through prioritising:
• Local purchases
• Increased employment opportunities for Saudi graduates
• Initiatives to support suppliers to raise their IKTVA
|For our current three projects in Saudi Arabia, we have
continued to enhance our IKTVA through the purchase of over US$45 million of local goods and services (US$900 million to date), representing over 65% of the project spend
|Continue our support of the IKTVA programme, exploring ways to partner with the local supply chain on a sustainable and mutually beneficial basis|
|Continue to enhance our tax risk management and compliance procedures||Maintained effective processes for monitoring and managing changes in tax laws and regulations||Follow progress of digitalisation of tax administration and continue to monitor changes to international tax system|
This video – produced by ADNOC – highlights the importance of in-country value and encouraging the workforce of the future in the United Arab Emirates. It features Ali Abdullah, UAE Country Chair at Petrofac, and Roudha Bin Bahr, a Petrofac engineer.
We continue to purchase a large proportion of goods and services from local vendors and suppliers, and also support a significant number of local jobs. While some governments require us to do this, we typically go beyond our contractual and regulatory obligations regarding local content.
In 2019, just taking into account our major non-joint venture projects, where we have direct control over procurement and subcontracting, the proportion of locally-sourced goods and services, increased from 31% (US $340M) in 2018 to 41% (US$570M) in 2019, reflecting our efforts to maximise our support of local supply chains, build and utilise capacity of SMEs and stimulate local economies.
We also supported approximately 57,000 jobs at our project sites. Around 95% of these jobs were through our subcontractors, the remainder being a mix of expatriate and local Petrofac employees and contractors.
Petrofac’s tax strategy is to:
US$322 million (tax paid in 2019)
We've placed orders with more than 650 Saudi suppliers for goods and services