PDO unveils its response to the striking/protesting Oil and gas workers; PDO staff form new Trade Union and secure regular meets with Minister Rumhy

Petroleum Development Oman - the dominant producer of oil and gas in the Sultanate and 60% owned by the Government - sent an email to all staff a few days ago detailing the managers' and shareholders' response to the protesting and striking employees: Yep, you guessed it, lots of new benefits! (These benefits will, of course, be paid by the people of Oman through immediately reduced oil and gas income, BTW.)

The protesters also got the annulment of the previous (and pathetic) 'Trade Union' and will elect a new one. AND HE Dr Rumhy, Minister of Oil and Gas, agreed to meet their representatives for a personal chat on a quarterly basis.

I was sent a few copies of the email, and thought it would be of interest to readers to see what the details were of the 'EVP' revamp [that's Employee Value Proposition in management speak].

The email is typical of why Oman has done so well getting a partnership with Shell at PDO, and why so many other businesses in the Sultanate have been stealing senior Omani PDO employees for years - quality talent. The EVP improvement plan is clear, specific, and gives a transparent timeline of the way forward. A good solid engineering approach chaps. If only the rest of the country could have such clarity...

The email's failing IMHO is that it says precious little about what the employees will do in return for such largesses: I would have recommended the removal of the right to strike as a pre-condition. As discussed earlier, PDO is the life blood of Oman's entire economy, and the ability to hold the nation hostage to blackmail your way into additional perks should not be acceptable.

The danger is that this may set a high bar for similar negotiations at other places in Oman. OIB (Oman International Bank), owned by the rich and mysterious Omani businessman Dr Omar Zawawi, for example, has effectively shut down for more than a week and staff there are in danger of killing off the very business they are employed in.

The Omani owners of businesses comprised of Indian staff must be laughing: so far there is no sign of the subcontinent workforce protesting nor of getting proper Trade Unions. No EVP revamp for the vast majority of Oman's workers then. Benefits like those below will simply make hiring an Omani even more of a stupid idea for businesses. It will, as now, be seen by many business owners as yet more red tape and tax to burden the business with, while most of the work gets done by expats. This will therefore further strengthen the big companies of the Oligarchs and hammer another barrier onto the SMEs that are the only hope Oman has of working itself out of oil and gas dependency.

Hey, but the PDO staff are OK, so that's alright. Hopefully they will be also be able to get petrol, as no-one else can with the tanker drivers on strike and rationing in effect...

Here's that goodie bag:


Photo: Not Santa, but Mr Raoul Restucci, Managing Director of Petroleum Development Oman. While he is an expat on secondment from Shell, his managing executive committee are all Omani, BTW.

MDC [UD: Managing Directors' Committee] Update on EVP Commitments

Dear Colleagues,
Recently, the MDC and I have had a number of staff engagements with you and have taken on board your feedback and demands to us. And today, we are pleased to outline our commitment, and timeline, to address your issues and a number of immediate improvements to staff members’ Employee Value Proposition (EVP).

Today
The HD Circular PDO.HD.09.11 will be issued concurrently to this note and will provide greater detail to these EVP improvements that we are providing staff:

EVP Improvement
1. Consistent with Government directives, all Omani staff will receive an increase of RO 50 for Salary Group (SG) 1 & 2; RO 60 for SG3 - SG6; RO 80 for SG7 - SG10; RO 100 for SG11 - SG15, as a cost of living adjustment effective 1st April 2011.

2. All Omani female employees can take the option of retiring at the earlier age of 55 years with a reduced discount of 2% per annum as requested;

3. TOPs trainees [UD: young operators of the oil field equipment], during their field training, will move to a “2 weeks on / 2 weeks off” shift cycle, inclusive of current holiday leave entitlement;

4. The hardship loan that staff can draw on once every three years will increase to RO 3,000;

5. PDO will pay 100% of Government hospital accommodation in private rooms for all employees;

6. Operating field staff attending HLD trainings during their rest days will receive days in lieu and accommodation in MAF camp will be provided for those travelling from our operating fields to attend a coastal-based training.


In addition to the above, today we also confirm the following:

· The MDC has set up a working team to engage with various groups to support the formation and elections of a representative PDO Trade Union. Those members include: Amran Marhubi, Ibtisam al Riyami, and Salim al Aufi, including HRR5 members Saif Shuaily and Ismail Raisi.

· In addition to the recently advertised 200 scholarships that PDO will be awarding to communities in our operating areas, PDO will also increase secondary school leaver scholarships to 50 in support of the country’s development.

· We have agreed to increase the number of technical college graduates from the current level of 90 to 180 per year for our TOP programme. This will help to accelerate our Omanisation plan and support business needs. We will also add a number of trainers to support this programme.

· We will continue to strengthen the participation and involvement of key operating staff in project design reviews as required.

· There will be a cross-PDO/Contractor team led by Saif al Hinai who will work to ensure that there is the right and consistent level of service and quality of life in all camps. This team will also work with OPAL to ensure that minimum standards are established across our industry and especially across the sub-contracting community, under our Duty of Care and value for Oman vision.

Further details of these initiatives will be communicated in due course on the PDO Intranet.

We are also actively working towards progressing additional improvements and changes. This is what you can expect from the MDC and I before the summer.


By the end of next week, we will:
· Complete the review of our operating field car fleet and provide (best estimate) replacement vehicle timings and targets to our staff;

· Provide details of the MDC Staff Engagement Plan in order to provide staff with greater transparency and increased engagement with all the MDC members. The goal of this engagement plan is to enhance discussion on key issues and opportunities and to improve the consultation process ahead of developing and communicating changes in company policies. The MDC and I will share market survey results, promotion process and outcomes, training aspirations, selection and outcomes with Trade Union staff elected and representative of PDO employees, as and when this information is available and representative bodies are established. Additionally, all emails/queries to the MD web-page will also be copied to Trade Union representatives so that they are aware of all submissions and associated replies.


By the end of April, we will:
· Review all proposals concerning the housing loan and where appropriate submit recommendations for approval by the PDO Board;

· Publish the Subject Matter Experts (SME) and Technical Expert (TE) roadmap, identifying and progressing targets in each function, and communicate the recognition package;

· Create a new web page within PDO Intranet featuring the roles and responsibilities of each MDC member, showcasing the corporate and functional committees, and communicating the State Audit plans. This website content will develop based on additional and appropriate requests for transparency;

· Strengthen the “Whistle Blowing” process, establishing investigation teams that will report directly to the MD and we will share (non-personal) matters and outcomes with the PDO Trade Union representatives and across the organisation where key learnings are identified.


By the end of May, we will:
· Complete the post-implementation review of the Improved Medical Benefit and launch agreed further improvements, including any applicable coverage for eligible family members.


Let me repeat that the MDC and I are dedicated to supporting excellence in our people and creating value for our stakeholders and Oman. We do this by engaging with you, our staff, as well as engaging with our communities, our contractors, the Ministries, and our shareholders. The result of these engagements is not time wasted nor words lost, it results into actions and plans that help us progress towards a sustainable future. We’re all in this journey together and in times of difficulty, we need to continue to set the role model across our industry and for Oman.

Rest assured that we will continue to seek your suggestions for improvement; for example, through MD lunches, MDC engagements and Trade Union representatives. We will also continue to assess our competitive position in the market to review and adjust base salaries and other terms where appropriate.

Later today, the MDC and I will engage with a very large number of contractor CEOs with the aim to resolve the debilitating industrial action which has resulted in production deferment and to progress in an aligned fashion in order to realise our goal of an additional 1,000 Omani jobs per annum. We will also aim to address salary and working condition improvements for over 20,000 contracting staff working in our operating fields and we have invited all upstream operators to join us.

In closing, let me restate that I need your help and commitment to support Oman, no more than at this time, and to fulfil our privileged position to produce Oil & Gas in support of the Nation’s prosperity and ambitions.

Early in the year we commenced on our journey to make PDO the one and only place to be. Together with our contractors, MoG, MoM, and the PDO Trade Union, we will address how best to realize this to support Omanisation, the excellence in our people and value creation for Oman.

The MDC and I remain steadfast that we must all work together – as one PDO – to continuously improve our business performance and to deliver on the promises to stakeholders and Oman.

Regards,
Raoul Restucci
Managing Director