C2100000379 Provision of OCTG and Sucker Rods Inspection

Petroleum Development Oman LLC

Contract Number
C2100000379
Provision of OCTG and Sucker Rods Inspection
Section C7
In Country Value

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C2100000379 Provision of OCTG and Sucker Rods Inspection

Contents
1. INTRODUCTION 3
1.1. GENERAL..............................................................................................................................................................3
1.2. ABBREVIATIONS....................................................................................................................................................3
1.3. DEFINITIONS.........................................................................................................................................................3
2. ICV PLAN 4
2.1. GENERAL..............................................................................................................................................................4
2.2. RESPONSIBILITIES OF CONTRACTOR.....................................................................................................................4
2.3. WORKFORCE.........................................................................................................................................................5
2.4. GOODS..................................................................................................................................................................5
3. SMALL AND MEDIUM ENTERPRISES (SMES) (N/A) 6
4. LOCAL COMMUNITY CONTRACTORS (LCCS) (N/A) 6
5. INTER-BIDDING PROCESS FOR SME AND/OR LCC SUBCONTRACTORS (N/A) 6
6. ICV REPORTING & AUDIT 6
6.1. GENERAL..............................................................................................................................................................6
6.2. SME/LCC PERFORMANCE (N/A).........................................................................................................................6
6.3. AUDIT...................................................................................................................................................................6
7. REMEDIES 7
7.1. GENERAL..............................................................................................................................................................7
7.2. FAILURE TO FULFIL ICV OBLIGATIONS................................................................................................................7
7.3. FAILURE TO COMPLY WITH INTER-BIDDING PROCESS FOR SME AND/OR LCC SUBCONTRACTORS (N/A)..........8
7.4. FAILURE TO UPDATE ICV M&R SYSTEM.............................................................................................................8
8. OIL AND GAS INDUSTRY 1.2% TRAINING LEVY 8
8.1. GENERAL..............................................................................................................................................................8
9. TRANSFER AND REDEPLOYMENT OF OMANI NATIONAL PERSONNEL 8
9.1. TRANSFER OF OMANI NATIONAL PERSONNEL FROM THE INCUMBENT CONTRACTOR (ON COMMENCEMENT OF
THIS CONTRACT)...............................................................................................................................................................8
9.2. REDEPLOYMENT OF CONTRACTOR OMANI NATIONAL PERSONNEL (ON EXPIRY/TERMINATION OF THIS
CONTRACT).......................................................................................................................................................................8
10. MISCELLANEOUS (N/A) 9

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1. Introduction
1.1. General
1.1.1. Contractor shall comply with the In Country Value (ICV) obligations detailed below and
summarised as follows:
a) Paragraph 2 (ICV Plan) describes how Contractor shall fulfil the ICV requirements for the
Contract for each of the areas given in Section C5 (Schedule of Rates), Schedule “G” and
further detailed in the ICV Plan.
b) Paragraph 3 (Small Medium Enterprises (SMEs)) describes the requirement (if any) for
Contractor to subcontract scope to SMEs.
c) Paragraph 4 (Local Community Contractors (LCCs)) describes the requirement (if any) for
Contractor to subcontract scope to LCCs.
d) Paragraph 5 (Inter-bidding process for SME and/or LCC Subcontractors) describes the
mandatory procedure and systems to be used by Contractor when tendering scope to LCC
and/or SME Subcontractors.
e) Paragraph 6 (ICV Reporting) describes the mandatory procedure and systems to be used by
Contractor to report ICV information to Company.
f) Paragraph 7 (Remedies) describes the consequences of noncompliance with any of the ICV
obligations detailed in this Section C7.
g) Paragraph 8 (Oil and Gas Industry 1.2% Training Levy) describes the 1.2% training levy to
be deducted from the net amount invoiced to contractors.
h) Paragraph 9 (Transfer and Redeployment of Omani National Personnel) describes the
process to transfer and/or redeploy Omani National Personnel.
1.2. Abbreviations

BGeTS Business Gateways eTendering System

EOI Expression of Interest
The Cooperation Council for the Arab States of the Gulf, originally
GCC
known as the Gulf Cooperation Council
ICV In Country Value
JSRS Joint Supplier Registration System
LCC Local Community Contractor
M&R Monitoring & Reporting
MCI Ministry of Commerce and Industry
Riyada Public Authority for Small and Medium Enterprises Development
SME Small Medium Enterprise

1.3. Definitions
1.3.1. Business Gateways eTendering System shall mean the online tendering system developed by
Business Gateways International available to suppliers registered with JSRS.
1.3.2. Entrepreneurs Card shall mean the card issued to Omani entrepreneurs who own SMEs by the
Public Authority for Small and Medium Enterprises Development (Riyada). https://riyada.om/en-
us/Pages/Home.aspx.
1.3.3. GCC Product shall mean a product, material or equipment with a certificate issued by a GCC
member government confirming it is from that GCC country.
1.3.4. Foreign Product shall mean a product, material or equipment that is not a Made-in-Oman good
or GCC Product.

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1.3.5. ICV Monitoring & Reporting System shall mean Company’s online system to be regularly
updated by Contractor to report on ICV delivery against the ICV Plan
(https://apps.pdo.co.om/ICV/frmLogin.aspx).
1.3.6. ICV Plan shall mean a plan produced by Contractor describing the strategy and actions aimed at
the development and use of goods and services produced in Oman and the development and
employment of Omani Nationals for the entire Contract.
1.3.7. In Country Value shall mean the total spend retained in country that can benefit business
development, contribute to human capability development and stimulate productivity in the Omani
economy. In short, products made and services provided by Omanis (in Oman).
1.3.8. Joint Supplier Registration System shall mean the supplier registration and certification
system (https://businessgateways.com/joint-supplier-registration-system) implemented by
Business Gateways International on behalf of the Oman Ministry of Oil & Gas.
1.3.9. Local Community Contractor shall mean a contractor that is registered in the Joint Supplier
Registration System (JSRS) as a Company LCC. For further information on LCC(s), Contractor shall
send an email to LCCsupport@pdo.co.om
1.3.10. Made-in-Oman good shall mean a product, material or equipment that is included in the list of
goods of Omani origin issued by the Ministry of Commerce and Industry (www.moci.gov.om).
1.3.11. Small Medium Enterprise shall mean any micro, small or medium enterprise that has registered
as an SME in the JSRS.
1.3.12. SME/LCC Tender shall mean any Invitation to Tender, Request for Proposal, Request for
Quotation or similar offering issued to SMEs or LCCs via BGeTS to select SME and/or LCC
Subcontractors to deliver any scope under the Contract in accordance with Article 5.

2. ICV Plan
2.1. General
2.1.1. Contractor shall fulfil the ICV requirements for the Contract for each of the areas as stated in
Section C5 (Schedule of Rates), Schedule “G” and as further detailed in the ICV Plan.
2.1.2. The ICV Plan is a descriptive elaboration of each of the ICV areas as stipulated in the completed
Tables A to D of Schedule “G” of Section C5 submitted by Contractor and shall constitute an
integral part of the Contract and Contractor’s commitments stated therein shall constitute
contractual commitments to be delivered by Contractor.
2.1.3. If requested by Company, Contractor shall provide additional information clarifying or updating the
ICV Plan. The ICV Plan and related documents and correspondence shall distinguish between
proposals for the immediate term and medium/long term as well as those for continuous
development of ICV as part of the execution of the Work.
2.1.4. Contractor is encouraged to propose any new and/or creative initiatives that can help accelerate
the process of achieving Company’s objectives for ICV including but not limited to, earlier
implementation of the plan or wider participation of community vendors and contractors in it.
2.2. Responsibilities of Contractor
2.2.1. Contractor shall appoint an Omani National member of its senior staff as an ICV Manager / ICV
Lead (dedicated to the extent required to fulfil the responsibilities of the role to the satisfaction of
Company) who shall be responsible for developing, steering and implementing the ICV Plan,
preparing and submitting ICV reports to Company and shall also act as the coordinator for any
clarifications and for providing additional information requested by Company during the
Operational Period, establishing the ICV reporting schedule, answering Company’s clarifications on
monitoring reports, assisting the exercising of Company’s right to audit and all other tasks
reasonably required to monitor, deliver and report on Contractor’s compliance with ICV
obligations.
2.2.2. Contractor shall obtain certificates of origin, or any other documentation as may be required by
Omani legislation for the goods that are reported as being of Omani origin. Company reserves the
right to request copies of any such certificates.

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2.3. Workforce
2.3.1. Contractor shall comply with, and shall cause its Subcontractor(s) to comply with, all applicable
Law and regulations of the Sultanate of Oman governing the engagement and employment of
Contractor Personnel and, in particular, those related to Omanisation. Nothing contained in this
Paragraph shall contradict or relieve Contractor from any statutory obligation in accordance with
the Law and regulations of the Sultanate of Oman.
2.3.2. Contractor’s workforce related to the execution of the Contract is as set out in Section C5,
Schedule “G”, Table B (Workforce). Contractor shall ensure the ICV Plan achieves the following
minimum Omanisation levels during Operational Period (being measured on Contract
Commencement Date and thereafter on Anniversary Date every twelve (12) months after Contract
Commencement Date:

Job Contract
Item End of End of End of End of End of
Positions / Commencement
No Year 1 Year 2 Year 3 Year 4 Year 5
Discipline Date
Senior
1 50% 50% 65% 75% 75% 100%
Management
2 Professional 50% 50% 65% 75% 75% 100%
3 Supervisory 70% 70% 70% 75% 75% 80%
Skilled/ Semi
4 Skilled 70% 70% 70% 75% 75% 80%
Personnel
6 Unskilled 100% 100% 100% 100% 100% 100%
Table 1: Omanisation Targets

2.3.3. For the avoidance of doubt, Omanisation of any position or an Omanised position shall not be
deemed complete until training has been finalised and any incumbent expatriate Contractor
Personnel has transferred from the position and has relinquished all duties and responsibilities for
the position.
2.3.4. Contractor shall ensure that any Subcontractors comply with the plan for their applicable positions
so as to achieve the overall targets set in this plan.
2.3.5. Contractor shall train, develop and progress Omani National Contractor Personnel under the
Contract in accordance with good industry practice and maintain records of all such activities,
including training plans, progression plans, career paths and retention plans for audit purposes.
2.4. Goods
2.4.1. Where available, Contractor shall use or cause to be used Made-in-Oman goods and, where these
are not sufficient or not available, goods of GCC Origin, provided that both shall meet the pricing,
quality and delivery conditions of the Contract.
2.4.2. For Made-in-Oman goods, Company shall upon receipt of the relevant MCI Certificate, apply a
maximum of ten percent (10%) price benefit over Foreign Products and of five percent (5%) over
GCC Products in making the price comparison for the sourcing decision, based on the
encouragement and organisation of industry law issued by Royal Decree No 1/79 as amended, the
tender law issued by Royal Decree No 86/84 and the ministerial decision no 18/87 issued by the
Ministry of Finance.
2.4.3. On the same basis, for GCC Products, Company shall upon receipt of the appropriate certificate
from a competent authority, apply a maximum of five percent (5%) price benefit over Foreign
Products in making the price comparison for the sourcing decision.
2.4.4. If Company has applied a price benefit as explained above, but Company subsequently establishes
that Contractor has not obtained the appropriate certificates or the certificates have been

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withdrawn, then in addition to any fines applicable at Law, Company shall have the right to
recover the benefit given to Contractor as set out above. Where relevant this penalty shall be
applied pro-rata for any period where such certification was not in place.
2.4.5. If Company has applied the benefits as explained above, but Company subsequently establishes
that Contractor has intentionally misrepresented its intentions and the benefit was unduly
obtained, then Company shall have the right to terminate the Contract immediately upon Notice in
writing without compensation to Contractor.

3. Small and Medium Enterprises (SMEs) (N/A)

4. Local Community Contractors (LCCs) (N/A)
5. Inter-bidding process for SME and/or LCC Subcontractors (N/A)
6. ICV Reporting & Audit
6.1. General
6.1.1. Within twenty one (21) Days from the Effective Date of the Contract, Contractor shall submit the
ICV plan through the ICV Monitoring & Reporting (ICV M&R) System
(https://apps.pdo.co.om/ICV/frmLogin.aspx) in the same format as Section C5, Schedule G and
containing the ICV data as submitted during the tendering process, unless otherwise approved by
Company. Company shall provide ICV M&R login details after the Effective Date of the Contract.
6.1.2. Thereafter, Contractor shall submit to Company the actual ICV performance through Company’s
ICV M&R System. Contractor shall report the actual ICV performance achieved from the Effective
Date of the Contract in the reporting frequency as tabulated below:

Reporting Period Reporting Due Date

1st Quarter of the year 21st April

2nd Quarter of the year 21st July
3rd Quarter of the year 21st October
4th Quarter of the year 21st January
Business Performance Reviews As required

6.1.3. Contractor shall ensure that all ICV data reported to Company are true and accurate. Company
reserves the right to audit any information regarding ICV provided by Contractor and/or request
supporting additional information or to appoint a third party to do so on its behalf.
6.1.4. Contractor shall report the actual performance against commitments of the approved ICV Plan
throughout the Operational Period.
6.1.5. At any time during the Contract period, Company reserves the right to request Contractor to
provide an overall Contractor ICV performance report for review.
6.1.6. Contractor is responsible for collecting, processing and storing information related to ICV received
from Subcontractors and Manufacturers. Contractor shall keep all backup copies of the information
and shall provide such backup to Company upon Company’s request.
6.2. SME/LCC Performance (N/A)
6.3. Audit
6.3.1. Company shall have the right to audit all documents and information reasonably required to
monitor ICV performance by Contractor and/or Subcontractors including full access to:
a. SME/LCC Tender records issued via BGeTS relating to the Contract, including SME/LCC Tender
documents issued by Contractor, bidder proposals, clarification questions and answers, and
details of awards made to SMEs/LCCs;

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b. Evaluation models and results, justifications for any disqualifications and awards (particularly if
not awarded to lowest bidder) and copies of any Subcontracts (including all commercial
information) awarded by Contractor to SMEs and/or LCCs;
c. Any additional information or documentation in any format reasonably required by Company
required to monitor ICV performance by Contractor and/or Subcontractors.
6.3.2. Company shall have the right at any reasonable time to audit or appoint a Third Party to audit any
aspect related to ICV performance and any ICV related information provided by Contractor.
6.3.3. Contractor shall keep up-to-date records related to Omani National and non-Omani National
Contractor Personnel engaged under the Contract. Such records shall include but not be limited to
payroll data, Contractor Personnel files, Public Authority for Social Insurance (PASI), and wage/job
cards. Company shall have the rights of access to all information held by Contractor and its
Subcontractors concerning the Omani National and non-Omani National Contractor Personnel and
their performance. Contractor shall also provide, if requested, a breakdown of ICV related
Investments, Goods and Services and all other information reasonably required.

7. Remedies
7.1. General
7.1.1. It is Contractor’s responsibility to establish the required Subcontract(s) with SME(s) and/or LCC(s)
in accordance with the obligations in this Section C7. In the event Contractor is unable to meet
these obligations, the following remedies, in addition to any other rights under the Contract, may
be applied at Company’s sole discretion.
7.2. Failure to fulfil ICV Obligations
7.2.1. In the event that Contractor fails to comply with its ICV obligations, Contractor shall within thirty
(30) Days’ Notice from Company of noncompliance submit a detailed written explanation for the
failure together with Contractor’s corrective action plan to remedy such noncompliance
(“Remediation Plan”) for approval by Company. After Company’s approval, Contractor shall
thereafter diligently and expeditiously implement and deliver such Remediation Plan.
7.2.2. In the event any deliverable or milestone detailed in the Remediation Plan is delayed by more than
two (2) months, senior management of Company and Contractor shall meet at Company’s
premises to discuss the importance of ICV agree a further Remediation Plan.
7.2.3. Notwithstanding the submission (or otherwise) of a Remediation Plan, Company shall apply the
Penalties (if any) related to ICV as specified in Section C5 with effect from the date of initial
default.
7.2.4. In the event any deliverable or milestone detailed in the further Remediation Plan is delayed by
more than two (2) months, Company reserves the right to take such actions as it deems fit under
the Contract including but not limited to the following:
a) Where Contractor has failed to meet the minimum value/percentage of scope to be
awarded to SMEs and/or LCCs in accordance with paragraphs 3. and 4. above,
Company shall be entitled to withhold from payments of all future Contractor invoices
any sums that should have been awarded to SMEs and/or LCCs by Contractor until
Contractor meets the minimum value/percentage required. For example, if the total
obligation was to award 20% of the scope to SMEs/LCCs, but only 15% was so
awarded, 5% all future Contractor invoices shall be withheld from Contractor. When
Contractor meets the minimum value/percentage required, any sums withheld by
Company shall be paid to Contractor.
b) In the event Contractor is unable to meet the minimum value/percentage of scope to
be awarded to SMEs and/or LCCs in accordance with paragraphs 3. and 4. above,
Contractor shall meet Company to discuss options and alternatives to comply with this
obligation. Where Contractor is still unable to comply, having used all reasonable
endeavours to implement all reasonable proposals/suggestions of Company,
Contractor may apply to Company for a reduction of this obligation with evidence of all
efforts taken by Contractor to meet this obligation. Any such reduction of the
obligation is at Company’s sole discretion. In the event circumstances or market

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conditions change, Company reserves the right to cancel or amend such reduction, in
which event Contractor shall be obliged to meet the minimum value/percentage of
scope to be awarded to SMEs and/or LCCs as previously agreed.
c) If, on termination or expiry of the Contract, it transpires that Contractor has failed to
meet the minimum value/percentage of scope to be awarded to SMEs and/or LCCs in
accordance with paragraphs 3. and 4. above, Company shall be entitled to recover
from Contractor any sums that should have been awarded to SMEs and/or LCCs by
Contractor. For example, if the total obligation was to award 20% of the scope to
SMEs/LCCs, but only 15% was so awarded, 5% of the total expenditure under the
Contract shall be due from Contractor.
d) Company shall be entitled to suspend or terminate the Contract based on default by
Contractor in accordance with the provisions of Section C3.
e) Company shall be entitled to suspend the Contractor from bidding for future contracts
with Company.

7.3. Failure to comply with Inter-bidding process for SME and/or LCC Subcontractors
(N/A)
7.4. Failure to update ICV M&R system
7.4.1. In the event Contractor fails to upload all data reasonably required in Company’s ICV M&R system
within one (1) month of the Effective Date of the Contract or within one (1) month of the end of
the Reporting Period of each quarter detailed in sub-paragraph 6.1.2. (for example, by 30 th April
for reporting for the 1st Quarter of the year), Company shall be entitled to block the creation of
Service Entries under the Contract until such upload of data is complete.

8. Oil and Gas Industry 1.2% Training Levy

8.1. General
8.1.1. Major oil and gas operators were instructed by the Ministry of Oil and Gas (now the Ministry of
Energy and Minerals) on 11 November 2018 (ref: MOG/US/002-02/2018/6485) to implement the
Oil and Gas Industry Training Levy. The purpose of the training levy is to increase job
opportunities for the Omani workforce in the oil and gas contractor community by financing the
training of Omanis in skilled and semi-skilled work opportunities. Accordingly, from 1 January
2019, all new contracts include provision for a 1.2% training levy to be deducted from the net
amount invoiced to contractors, as detailed in Section C5 (Schedule of Rates/Prices.

9. Transfer and Redeployment of Omani National Personnel

9.1. Transfer of Omani National Personnel from the Incumbent contractor (on
Commencement of this Contract)
9.1.1. In accordance with the law, Omani National Personnel from the incumbent contractor shall be
entitled to transfer to the Contractor where the incumbent contractor is willing to release those
Omani National Personnel. Contractor shall coordinate with the incumbent contractor to identify
the impacted Omani National Personnel working under the incumbent contract and available for
release and take all necessary steps to smoothly transfer those impacted Omani National
Personnel to Contractor within six (6) months from the effective date as identified in Contractor’s
Mobilisation and Transition Plan (where applicable).
9.1.2. It is Contractor’s responsibility to coordinate with the impacted Omani National Personnel, the
incumbent contractor and Company for a smooth transition without any impact on the individual
Omani National Personnel) and Company business.
9.1.3. All costs associated with the transfer of personnel shall be deemed to be included in Contract
Price.
9.1.4. Transferability of impacted Subcontractor Omani national employees is the responsibility of
Contractor and in compliance with the labour law.

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9.1.5. On Expiry/Termination of this Contract, Contractor shall provide all assistance and cooperation
reasonably required by any replacement contractor relating to the potential transfer of Contractor
Omani National Personnel to such replacement contractor at no cost.
9.2. Redeployment of Contractor Omani National Personnel (on Expiry/Termination of this
Contract)
9.2.1. Redeployment is broadly defined as finding alternative work opportunities for redundant or surplus
Contractor Omani National Personnel on Expiry/Termination of this Contract.
9.2.2. As per the Ministry of Labour provisions and local regulations for redeployment, in the event
Contractor Omani National Personnel is out-of-work due to project completion, where such scope
or project is not going to be retendered to any other contractor or the Contract has expired,
Contractor shall be responsible and shall make all necessary arrangements to redeploy such
Omani National Personnel under the Contractor. Without prejudice to the foregoing generality, in
the event of (i) expiry of the Contract, (ii) any termination of the Contract by Company (other
than termination for convenience) or (iii) any reduction in the Work, Contractor shall also comply
(and ensure any Subcontractor shall comply insofar as any Omani National Personnel of
Subcontractor are impacted) with the following in relation to any Contractor Omani National
Personnel:
a) Contractor shall notify the Redeployment Committee at Ministry of Labour (MOL) at least three
(3) calendar months prior to Contractor’s intention to release any impacted Contractor Omani
National Personnel;
b) Contractor shall endeavour to find alternative work opportunities for Contractor Omani National
Personnel within the Contractor organisation, including affiliate companies or other companies
where possible and look for opportunities to mitigate the redundancy of Omani National
Personnel. This shall include, where practicable, increased Omanisation by expatriate
replacement plans within Contractor and upskilling/retraining affected Contractor Omani
National Personnel.
c) Where alternative work opportunities have not been found for affected Contractor Omani
National Personnel in accordance with 9.2.2.b), remaining Contractor Omani National
Personnel related to the expiring, terminated or reduced Contract scope shall be formally
communicated six months in advance to Company with evidence of actions taken to find such
alternative work opportunities for Contractor Omani National Personnel. Company shall
undertake due diligence to verify compliance of the Contractor/Subcontractor to the above
process, and use reasonable endeavours to find alternative work opportunities for any
Contractor Omani National Personnel to be redeployed in Company’s active contracts with
other contractors where Contractor has been unable to do so.
d) In the event Contractor and Company are unable to find alternative work opportunities for any
Contractor Omani National Personnel, Contractor shall notify the Redeployment Committee of
any remaining Contractor Omani National Personnel at least 3 (three) months prior to the
Expiry Date of the Contract (where practicable).
e) In accordance with Ministry of Labour Redeployment regulations and the Ministry of Energy
and Minerals (MEM) Redeployment Blueprint Strategy, Contractor (or Subcontractor, where
applicable) shall not be entitled to release or terminate any affected Contractor Omani National
Personnel until the end of the three (3) calendar month period detailed in Article 9.2.2.d)
above and Contractor shall be responsible for any compensation due to any affected
Contractor Omani National Personnel as a result of this process or resulting termination of
employment.
9.2.3. Contractor shall aim to encourage Omanis to be upskilled or reskilled into technical fields and to
increase the likelihood of being redeployed at the end of the project with the same contractor or
other contractors.

10. Miscellaneous (N/A)

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