ChallengesfacingOrpicgrowth

Overview Oman

Overview

Oman Oil Refineries and Petroleum Industries Company.

• Created from the integration of three companies - Oman Refineries and

Petrochemicals Company LLC (ORPC), Aromatics Oman LLC (AOL) and Oman

Polypropylene (OPP) -2011

• The first Refinery was established in Mina Al-Fahal in 1982

• 75% Owned by Ministry of Finance + 25% by Oman Oil Company.

Overview

Strategic Growth

Three major projects will fuel Orpic’s transformation from anational oil refinery to an international integrated refining andpetrochemicals company:

2016

SRIP

2017

MSPP

2018

LPP

Orpic Overview

Strategic Growth

KeyChallenges

Lawand

Regulation

TalentManagement

Processand

System

CommunityProduct

and ProfitChallenges

Integratingnew assets

Risks

Law and Regulation

• New project need to comply with locallaws, regulations and policies

• State and federal laws and regulations,professional standards, and technicalstandards, environmental requirements.

Talent Management

ATTRACT

• Location (Sohar) – Limited medical facilities, education, lack of township, “Lack of belongingness”

• Environment - limited pool of right caliber Omanis, competition fromother projects

DEVELOP

• Invest in high quality trainee and not average caliber although this wouldcost more in the short term shall payoff in the long term.

• Lack on in grown cadre for future manning. Not doing enough forsustainability.

• Knowledge transfer

RETAIN

• Provide clear career path

• Higher studies with lock in

• Focus on alternatives not just salary but work life balance.

• Need a structured retention plan.

Talent Management

Talent Management

DeployingTechnology to

source CVs, Pre-selected pool

sourcing

CommunicateEmployee Value

Proposition to Orpicstaff.

Leadershipdevelopment

program

Talent Management

Process and System

Right Process Right SystemData base supporting

decision making

Integrated systemconnectivity/linkagefor smooth operation

connectivity/linkagefor smooth operation

SRIP support in reduction ofemission

MSPP reduce traffic oftrucks transportation

Emission control system toregular monitor

(Sox, Nox, Flaring)

Right Managementinformation system

Stakeholder engagementsuch as Ministry of

environment and otherrelated parties

Process and System

Community

Develop and implement aCorporate Social Responsibility

policy and procedures.

Build a strong partnership withvarious stakeholders

(Community, Government andNGOs)

Enhance Orpic visibility to allstakeholders and understanding

Orpic Grow Strategy

Corporate social responsibilityinitiatives and projects as a

platform for enhancing visibilityand community understanding

Orpic contribution to OmaniEconomy

Maximize cost effectivepurchases from national

suppliers and support SME’s.

Orpic community engagementstrategy

Product and Profit Challenges

Challenge of increase of growingeconomy

Challenge of increase of growingeconomy

Optimizing our ProcessUtilization of existing

Assets

Meeting the Local FuelsDemand.

Quality of Raw Materials

Optimize the current refineryand petrochemical flows to

improve motor gasoline salesand increase benzene

production.

Produce two new types ofpolymers (HDPE and

LLDPE) along withincreased polypropylene

production

Integrating new assets

• Integration of new projects with existing plants/assets• Ensuring connectivity/linkage between old and new assets, and smooth

operation

Integrating new assets

Impact of the new strategicgrowth projects on existing

working assets and ensure theirsmooth integration;

integration points between thethree growth projects andensure they are addressed

effectively;

Growth projects are fully awareof each other’s deliverables andoutcomes to ensure the impact

of such deliverables andoutcomes on these projects are

managed;

Projects are fully aware of eachother’s deliverables and

outcomes to ensure the impactof such deliverables and

outcomes on these projects aremanaged;

Identify any additionalopportunities or advantages

that result from the integrationof the 3 growth projects with

existing business.

Avoid silo working and they areregularly assessing and

identifying integration pointsand risks to other projects and

Orpic business;

Process changes to existingbusiness outcomes/deliverables

of the 3 growth projects areidentified and planned;

Identify any additionalopportunities or advantages

that result from the integrationof the 3 growth projects with

existing business.

Logistics

Supplier reluctance to tender forOrpic contracts

Inadequate tools to monitorcompliance for an organization

of the size of Orpic

Default by the EPC JV partners asthey bag several other projects

beyond their capacities, affectingresource allocation to Grow

projects leading to project delay

Non availability of suitablyqualified contractors/personnel

due to market forces andescalation in staff cost leading to

project delay

Delays in clearing machinery/equipment at Sohar Port

Change in scope of work and/orpoor management of changes

during detailed design andexecution leading to cost

increase

Delays in tendering process dueto complexity of structure and

high number of bids to beevaluated

Supply Chain Logistics

Additional increase ofdemand DepotManagement

Additional PipelineConnection between

Refineries and Depots

Additional Jetty requiredat Ports

Managing increase onDomestic Demand

Retails station integrationwith central monitoring

for subsidies products

Long process with customsclearance

Change of CustomsRegulations

Risks

Difficult to retaincompetent/critical

resources, contractorsdue to competition.

Failure to recruitexperienced staff

Attracting the RightTalents with the rightexperience due tomarket competition

Cost over run withMega projects when

introducing newsystems

Operations unplanneddowntime resulting from

frequent unplannedshutdown or extended

planned shutdown(reliability issues)

Failure to comply withlaws and regulations

Incorrect and/orinappropriateassumptions in

formulating businesscontinuity and disaster

recovery plans

Community Relatedconcerns and not

aware on Organizationfuture plans

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