1

Annual Report2011

POWERING THE NATION

2

OUR ACHIEVEMENTS IN FIGURES

FOR THE YEAR 2011

• Omanisation at 93 per cent representing

the highest rate in oil and gas operating

companies in the Sultanate.

• Annual gas transportation of 14 billion

cubic metres.

• Network gas availability 99.997 per cent.

• Gas transportation rate of 38.2 million

cubic metres per day.

• Highest gas transportation rate of 46.2

million cubic metres on a single day.

• Completion of two projects – Gas supply

to Vale and Mirbat Power and Desalination

Plants.

3His Majesty Sultan Qaboos Bin Said

4444444444444444444444444444

5

Chairman’s Message 06

CEO’s Message 08

Board of Directors 10

Management Team 12

Overview 14

Operations 18

Pipeline Integrity Management 22

Projects 26

Projects Completed 30

OGC in Technical and Social Actions 36

Health, Safety and Environment 40

Human Resources 44

Tawasul Integrated ERP System Implementation 46

CONTENTS

6

Oman Gas Company is now at the threshold of its second decade of operations. I am

delighted to report to you the uninterrupted growth of Oman Gas Company during

the year 2011.

Building on the previous success, and with the help from our shareholders, the

company has been expanding its operations throughout the Sultanate. We are proud

of our association with power and desalination plants, petrochemical and fertilizer

industries, oil refineries, steel plants and cement factories.

The major milestones such as EPC of Nimr Compressor Station, EPC of Fahud

Compressor Station, EPC of Expansion of South Oman Gas Transportation System,

and FEED of A’Duqm gas supply are testimony to the eagerness of the company

to play a pivotal role in the development of our beloved Oman. The Board of

Directors has approved new business plan whereby the company is paving the way

in playing a more proactive and diversified role. Such role would involve provision of

technical consultancy services in the area of hydrocarbon transportation, as well as

participation on the value-chain of the petrochemical industry.

In 2011, OGC delivered RO. 50 million worth of projects, which form another

milestone towards augmenting the existing Gas Transportation Network in Oman.

It forms part of the more than RO. 250 million outlay in the Government’s ongoing

Five Year Development Plan (2011-2015). The cumulative gas transported through

the company-wide network has leaped to reach 14 Billion Cubic Metres (BCM). The

company is also playing an active role in sustaining social community development

in its areas of operation.

I take this opportunity to express my sincere thanks to His Majesty the Sultan,

the Government of the Sultanate of Oman, the Shareholders, my colleagues at the

Board, OGC Management, our esteemed employees, contractors and customers for

their support and look forward to their continued support and patronage in our

future accomplishments as we enter another strategic period of our operations.

CHAIRMAN’S MESSAGE

Dr. Zaid Bin Khamis Al Siyabi

7

H.E. Mohammed bin Hamad Al RumhyMinister of Oil and Gas

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CEO’S MESSAGE

The success of OGC continued during 2011, thanks to our dedicated employees and

the support of our stakeholders, shareholders and contractors.

2011 in numbers perspective saw a 12 per cent growth of gas delivered, high gas

availability of 99.997% and high Omanisation of 93%.

The Company managed to deliver the required projects to support the additional

gas offtakes. Gas to the new power and desalination plant at Mirbat and VALE at

Sohar has been successfully completed while two projects to supply additional gas

to new power plants in Barka and Sohar were near to completion.

OGC is considering few projects which focus on maximising benefits from the Gas

Value Chain. Feasibility studies for both have been completed and I hope that a

decision will be taken soon with regards to the implementation of the projects. OGC

will also be starting two new projects to supply gas to Al Duqm industrial Area as

well as expansion of the capacity of Salalah pipeline.

I am also glad to see an excellent integrated approach between OGC and the

Ministry of Oil and Gas on technical aspects of the gas system and good to see

remarkable joint achievements aiming to optimise the gas value and infrastructure.

On the HSE, OGC managed to achieve good milestones but was not able to meet

the desired plans due to unfortunate death of a contractor employee as a result of

road traffic accident; road traffic remain top on Company agenda aiming to reduce

such hazard.

I take the opportunity to thank their Excellencies members of the previous Board

for their support to the Company and at the same time welcome the new Board

members.

Yousuf bin Mohammed Al Ojaili

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BOARD OF DIRECTORS

H.E. Dr. Mohammed bin Hamad Al RumhyMinister of Oil & Gas

Chairman (until August 2011)

Mr. Mohammed bin Nasser Al Khasibi

Vice Chairman (until February 2011)

BOARD OF DIRECTORS

H.E. Nasser bin Khamis Al Jashmi

Undersecretary, Ministry of Oil & Gas,

Board Member (until August 2011)

H.E. Khalifa bin Mubarak Al HinaiAdvisor, Ministry of Oil & Gas,

Board Member

(until August 2011)

H.E. Sultan bin Salim Al HabsiUndersecretary of Finance,

Ministry of Finance,

Board Member (until August 2011)

Mr. Salim bin Zahir Al SibaniCEO Oman Oil Exploration and Production,

Board Member

(until March 2011)berer (un(

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Mr. Hilal bin Ali Al KharusiHead of Business Development,

Oman Oil Company

Board Member

Mrs. Awatiff bint Mohammed Al Hikmani

Director General of

Investigation & Assessment,

Ministry of Finance, Board Member

Vice Chairperson

Dr. Zaid Bin Khamis Al SiyabiDirector General Exploration & Production for Oil & Gas

Ministry of Oil & Gas

Chairman

Mrs. Kauthar bint Ali Al AbdaliDirector of Financial Evaluation & Follow-up of

Petroleum Investment, Ministry of Oil & Gas,

Board Member

Mr. Salih bin Ali Al HarthyDirector Gas Revenues,

Ministry of Finance,

Board Member

Mr. Abdullah bin Ahmed Al ShanfariDirector General of

Petroleum Industries,

Ministry of Oil & Gas, Board Member

Mr. Rashid bin Ali Al KhaifiDirector of Treasury

Ministry of Finance

Board Member

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MANAGEMENT TEAM

Mr. Yousuf bin Mohammed Al OjailiChief Executive Officer

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Mr. Maktoom bin Rashid Al MataniGeneral Manager,

Engineering & Technical Services

Mr. Abdulaziz bin Said Al MujaibiGeneral Manager, Operations

Mr. Ahmed Mohd Ali TaqiGeneral Manager,

Finance & Corporate Services

Mr. Nasser bin Mohammed Al KindiHuman Resources Manager

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14

Established in August 2000 as a closed joint stock company, Oman Gas

Company (OGC) SAOC is involved in the transmission and distribution

of natural gas, through a large network of gas pipelines, compressor

stations and gas supply stations. Fully owned by the Government of the

Sultanate of Oman, the Company’s shareholders are the Ministry of Oil &

Gas (80 per cent) and Oman Oil Company (20 per cent).

OGC now owns and operates a gas distribution pipeline network of more

than 2,500 kms covering the length and breadth of the Sultanate of

Oman.

In 2011, OGC was able to deliver around 14 billion cubic metres (BCM)

of natural gas to its customers including power and desalination plants,

petrochemical and fertiliser industries, oil refineries, industrial estates,

Sultan Qaboos University, steel and cement plants. This figure shows an

increase of 12 per cent over the previous year’s figures.

OGC strives to be an integrated, commercially oriented company,

capable of developing and operating hydrocarbon facilities in Oman and

to become the gas technical reference for all stakeholders. Its mission

is to add value and contribute to the Sultanate’s economic growth by

developing and managing reliable and efficient hydrocarbon operations.

OVERVIEW

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Muscat:BLEND OF TRADITION AND MODERNITY

Muscat blends tradition and modernity in perfect harmony with nature. Called “the Arab Tourism

Capital,” the modern city still retains its traditional charm in the form of several forts, castles and

historical monuments. These include Jalali and Mirani Forts, the capital’s most prominent landmarks

built in the 16th century AD. The forts and castles also stand testimony to Oman’s centuries old

Islamic past. Muscat offers all modern amenities to discerning visitors including its international

standard infrastructure such as state-of-the-art highways, flyovers, international airport, seaport

and an array of hotels, resorts, shopping malls and posh business centres.

Oman Gas Company’s head office is located in the heart of the city at Al Khuwair. The Company

also operates Gas Supply Stations (GSS) at Al Ghubra, Mina Al Fahal, and Rusayl. These Stations

provide gas to the Al Ghubra Power and Desalination Plant, Oman Refinery and Petrochemical

Co., Ministry of Defence (MAM) Power Plant, Rusayl Power Plant, Rusayl Industrial Estate, Oman

Cement Company, and Sultan Qaboos University.

OGC also maintains Gas Supply Stations and a pipeline network to various customers.

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Adequate supply of affordable energy is a pre-requisite for sustained growth, especially in

the developing and emerging economies. At the same time, the hazards posed by excessive

use of fossil fuels also cause much heart burn as the very survival of humankind is threatened

by people’s reckless pursuit for industrialisation.

Natural gas has emerged as the most benign fuel in today’s world. It is a new-age fuel with

the lowest carbon to hydrogen ratio. Natural Gas burns off in its entirety, making it the

cleanest of available fossil fuels. Natural Gas satisfies most of the requirements for a fuel in

a modern day industrial society – efficient, less-polluting and economical.

As the Company is entering the second decade of its operations, OGC is going through

an evolution to eventually transform itself from a mere gas transporter to an integrated

company in the gas industry.

OPERATIONS

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The Sultanate of Oman is on the path of fast-track industrial

development and OGC is now shouldering the responsibility of

energising an ever-growing list of clients without compromising

on Oman’s declared principles of environment protection and

preservation. The Company has achieved this through sustained

efforts by laying solid foundations for a modern gas distribution

infrastructure consisting of high pressure gas transportation

pipelines, compressor stations and gas supply stations, all not

involving any continous gas flaring.

GAS IMPORT

Oman Gas Company pioneered “cross border gas transportation” in

the region with the first import of gas received from the Dolphin

pipeline from Qatar via UAE in October 2008. OGC continues to

receive gas through this pipeline through the Buraimi Compressor

Station.

PIPELINE NETWORK

OGC has an extensive, world class gas pipeline network to ensure

uninterrupted, hassle-free gas supply to its customers.

GAS STATIONS

OGC operates through a vast network of compressor stations and

gas supply stations (GSS). The network has now grown into a state-

of-the-art distribution mechanism.

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Sohar:EMERGING INDUSTRIAL HUB

Sohar is the largest city in the Batinah region of the Sultanate of Oman and it is fast emerging as

the industrial hub of the country.

The coastal city of Sohar was once an important Islamic trading point and the largest town in the

country. This is the home city of Ahmed bin Majid, the historical sailor. One of the first references

to ‘Sohar’ is in the work of historian Yaqut al Hamawi who implies that the city took its name

in the 6th century AH from a descendant of Noah: Sohar bin Adam bin Sam bin Noah. When

the Palestinian Arab scholar Muqadisi visited the city in 10th century AH he described it as a

“flourishing city.”

The city is renowned for its copper deposits, and archaeological evidence points to copper extraction

being carried out 5,000 years ago. There are still three copper mines in operation in Sohar with

good copper deposits.

Today, Sohar Port is the leading industrial port in the region and the Port and the adjoining industrial

areas are home to several major industrial installations like the Sohar Aluminium Company, Jindal-

Shaheed Steel, Vale, Sohar Refinery, Methanol, Aromatics, Fertiliser and Polypropylene Co. Several

other industrial ventures are either on the anvil or in the process of implementation.

OGC operates through a regional office in Sohar and five Gas Supply Stations that cater to the

growing needs of the industries in and around Sohar. These stations feed a growing list of gas

consumers including Sohar Aluminium, Wadi Al Jizzi Power Plant, Wudam Power Plant, Sohar

Industrial Estate, Sohar Power Company, Al Batinah Power Company, Sohar International Urea &

Chemical Industry, Jindal-Shaheed Iron & Steel, Aromatics, Vale, Sohar Steel, Sohar Refinery and

Oman Methanol Co.

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Protecting the pipelines from potential hazards is one of the fundamental tasks in gas

transportation business. This task is also correlated to safety and environmental performance

and therefore it occupies a high place on Oman Gas Company’s agenda. OGC is committed to

ensure the integrity of its pipeline systems not only to enable the Company to successfully

meet its goal of delivering natural gas to end users but also to safeguard the public, our

customers, employees and the environment from potential hazards.

OGC has recently developed a systematic approach to pipeline safety and integrity management

programme (IMP). The primary goal of OGC IMP is the safe, reliable operation of the pipeline

system. It identifies multiple elements that define how the company works to prevent leaks,

determine pipelines that could affect high-consequence areas, and identify evaluation and

improvement opportunities to lower the operating risks of the pipeline.

PIPELINE INTEGRITY MANAGEMENT

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The company has introduced Pipeline Integrity Management System (PIMS) which is a software

that links all the data sets for analytical purposes. The PIMS software will be the main platform

for pipeline data including design, maintenance and inspection records. All integrity analysis and

corrosion assessment in addition to routine maintenance activities will be maintained in the

system.

During the course of 2011, the integrity department focused its efforts into demonstrating and

assuring the integrity of most critical pipelines which have been in operation for more than 20

years. Five critical pipelines have been successfully inspected using Inline Inspection technique

and integrity status is established. This will support subsequent planning and revision of mitigation

measures.

Extensive reviewing on integrity of Block Valve Station (BVS) valves has been completed in

2011. More than 90 BVS stations have been assessed for functionality and integrity purposes

and classified into colour coding. The outcome of this exercise will be the basis for rectification

programme that is planned for 2012.

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Fahud: THE ESSENCE OF DESERT CHARM

Fahud is part of Oman’s oil history as the place where the first oil well in the Sultanate was sunk

in May 1957 – many years before commercial oil explorations began in Oman. Though Fahud

disappointed in its initial test (the oil well was dry with very little oil output), today it is the central

base of Petroleum Development Oman’s (PDO) operations in the Adhahira Governorate of Oman.

It is a permanent oil camp and oil field in the middle of the central plain area of Oman. “Fahud”

means “leopard” which denotes that leopards are believed to have roamed this area once upon a

time.

Fahud still retains its antique charm with a predominantly Bedouin population. Most of the

Bedouins lead nomadic lives, relying on their herds on which they rely for milk, meat and “jameed”,

a type of yoghurt. For parts of the year, some families or family members return to a wandering

existence with their flocks. Few, however, are able to continue a truly nomadic existence though

the traditional Bedouin lifestyle is fast disappearing.

OGC has a regional office and operates a gas compressor station in Fahud and also houses several

kilometres of gas pipeline supplying gas to the Ministry of Defence Camp, Nizwa Industrial Estate,

Manah Power Plant, and Natih PDO Gathering Station. The pipeline network also links to Nimr,

Salalah, Sohar and Muscat pipeline networks.

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The year 2011 has been a year of several achievements for Oman Gas Company. The Company continues to

be the major source of the country’s energy demand from different regions. Not only that we have been

able to complete some major projects during the year, we have also laid down solid foundations for the

future which will endeavour to provide us great stimulus to our operations in the coming years.

ONGOING PROJECTS

The following are ongoing projects:

• EPC of Control System Replacement for Al-Ghubrah and Wadi Al Jizzi GSS

• EPC of Salalah Loopline and Fiber Optic Cable from Murayrat to Fahud

• EPC for Ad Duqm Pipeline & Gas Supply Stations

• EPC for Murayrat PLS Upgrade

• OGC office and accommodation at Ad’ Duqm (design)

• EPC of Associated industries at Salalah

• Nizwa Industrial Estate expansion study

• Raysut GSS upgrade

GAS DELIVERY

Oman Gas Company delivered 14 billion cubic metres of natural gas during the year recording a substantial

increase of 12 per cent over the previous year. The increase in supply was due to the increased demand for

gas at several industrial and power companies.

The daily average of gas delivered was 38.2 million standard cubic metres and the Company was able to

achieve the highest ever daily delivery quantity of 46.2 million standard cubic metres on 19 June 2011,

surpassing the previous year’s record of 42.6 million standard cubic metres. Overall gas availability during

the year was 99.997 per cent and the marginal reduction in target was due to some unplanned shutdowns

at some locations.

PROJECTS

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272

Power and Desalination sector dominated gas consumption during 2011 as well. The sector consumed around

53 per cent of the total gas delivered by OGC. Industrial and commercial consumers were the second in line in

consumption with the sector using 31 per cent of OGC gas. The rest of the delivered gas comprising 16 per cent

was consumed by the Oil Operations sector.

Sector-wise Gas Delivery 2011

Industrial & Commercial 31%

Oil operation 16%

Power and Desalination 53%

45

40

35

30

25

20

15

10

5

0

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

2010 Average 2011 Average

Million S

mM

illion S

m33/d

ay/d

ay

Average daily Gas delivery during 2010 and 2011 (January to December)

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Nimr:CHARM IN THE LAP OF NATURE

Nimr is an oil and gas field in the south, found in 1980. It is an oasis full of huge Al Ghaf trees

that grow in abundance in the area. Al Ghaf trees are unique and suited to the desert area as

they consume very little water for survival. This is one of the endangered species and serious

preservation efforts are on to save them from extinction. Nimr is also home to Omani Gazelle, an

endangered animal, which thrives in the area. Nimr is famous for its high cliffs and unspoilt white

sand beaches. Tourists and visitors throng this area to enjoy its panoramic beauty and peculiar

desert charm.

OGC has a regional office in Nimr and owns and operates a Gas Compressor Station and several

block valve stations (BVS) in the region. OGC also maintains a gas pipeline network comprising

18, 24 and 32 inch pipes from Saih Rawl to Nimr and Mukhaiznah oil field.

30

Oman Gas Company initiated several new projects during 2011 and many of the projects

under various stages of implementation were completed and commissioned during the year.

Supplying of gas to Mirbat power plant in the Salalah region and VALE in Sohar were two

such achievement. Some of the major milestones achieved by the Company during 2011 are:

• EPC of Nimr Compressor Station

• EPC of Fahud Compressor Station

PROJECTS COMPLETED

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313

• EPC of expansion of South Oman Gas Transportation System

• FEED of A’Duqm Pipeline and GSS

• EPC of gas supply to Barka Phase III and Sohar Power Co. II

• EPC of segregation of Metering Skid for OMCO and Wadi Al Jizzi Power Company

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PIPELINES

Earth pits modification/missing earth rods installation works were completed on the 32in Fahud-

Sohar pipeline BVS, Murayrat PLS, MAF GSS, 24” Murayrat to Barka pipeline BVS, 10” Murayrat to

MAF pipeline.

Damaged foundations repair works were completed at Shafa GSS and BVS of the 20-inch and 36-

inch pipelines. The pipeline from 24” Salalah to PDO Harweel station was commissioned and Site

Acceptance Testing of the fiscal metering skid was completed. Early Tie-in shutdown at Sohar for

the future customer Batinah Power Company was completed successfully.

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COMMUNICATION AND IT

The year witnessed several initiatives in the communication and information technology (IT) sector.

SCADA data transfer reliability was improved by moving the dialup station into the new SCADA using

GPRS at Muaskar Al Murtafiah Gas Station, Oman Cement and Sultan Qaboos University.

EQUIPMENT MAINTENANCE

Preventive maintenance of Trains A, B, and C at 12,000 hours of running and Train C at 16,000 hours

of running have been completed for Al-Buraimi Compressor Station.

Six-yearly equipment internal inspection and major service have been completed for the water bath

gas heater, gas liquid separator and instrument gas vessel at Sohar. To enhance company’s gas quality

monitoring system, gas chromatograph analyzers were installed at BVS-5 of the 32-inch Fahud-

Sohar pipeline, on the supply lines from Oxy and PTTEP.

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Salalah: DEEP-ROOTED IN HISTORY

The City of Salalah, in the Dhofar region of the Sultanate of Oman, is the epicentre of several

activities during the popular Khareef season. The green mountains, pristine beaches, streams, valleys

and its flora and fauna all combine to make Salalah a unique destination not only in the Gulf, but

in the entire Arab world. The Khareef Festival every year attracts large crowds from neighbouring

countries who prefer to remain in the place for longer periods to enjoy nature’s bounty with all its

vibrancy. Salalah is also famous for frankincense which grows in abundance at the natural settings

of the region’s mountains.

Salalah has been one of the busiest sea routes between India and Africa since time immemorial.

It has been a major port-of-call for maritime trading fleets between the Far East and India, and

Europe. It was also once the centre for spices and Frankincense trade on the Silk Route.

Strategically located on the sea route between the Arabian Peninsula, East Africa and Indian Ocean

Rim countries, Salalah offers one of the most significant pro-business environments in the region.

Salalah Port and the Free Zone are making waves in the region due to their strategic location on

the equatorial trade route between Asia and Africa. Several historical sites and monuments add to

the glory of Salalah which has in store a treat for any discerning visitor.

Oman Gas Company has a regional office at Salalah and maintains and operates two Gas Supply

Stations at Salalah and Mirbath to feed gas to major industrial installations like Dhofar Power

Company, Raysut Cement Company, Octal, Raysut Industrial Estate, Salalah Methanol Company,

and SembCorp Salalah Power & Water Company.

The Region also has 24-inch gas pipeline between Saih-Rawl and Salalah, one of the backbones of

the Company’s pipeline network system.

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OGC IN TECHNICAL AND SOCIAL ACTIONS

Oman Gas Company has been powering the nation for a decade. The Company is not

working in isolation and it involves in the industry and the community through various

programmes and initiatives. Oman Gas always takes active role in supporting technical

hubs at the national and regional levels and believes in sharing business expertise. OGC

sponsored and participated in several events and programmes during 2011.

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373

SPE Middle East Unconventional Gas Conference and Exhibition

The conference program brought together experts, researchers and oil and gas industry leaders

from all over the world to Oman. Presentations and debates on prominent unconventional

gas issues such as, unlocking value of unconventional gas, well testing and data acquisition,

reservoir modeling and other issues were outlined. OGC participated in the conference.

Second Technical Engineering Gathering

The Gathering was held at the Higher College of Technology. On the sideline of the gathering,

the exhibition stand of the Company attracted tremendous number of students and showcased

the latest business updates.

Seventh Annual Gas Arabia Summit 2011

The summit was held in Oman for the first time by effort of OGC and highlighted a number of

issues relevant to the new global emphasis on natural gas as a reliable source of energy for

powering industries in many economies of the world. Oman Gas had a remarkable presence

as it chaired steering committee, sponsored and presented several papers.

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EMPLOYEE ENGAGEMENTSOman Gas Company takes special care in providing employees with recreational and social engagement

opportunities. As part of the integrated brand marketing strategy, we aim to communicate our business

through the engagement of employees and their families and to bring new and fresh ideas to enhance

the image of the company as a leading company in the oil and gas industry in Oman.

Meisan Beach Ball TournamentThe Company participated with two teams which competed strongly in the two-day beach ball

tournament organised at the Oman Diving Centre. The two teams showed the spirit of integration and

teambuilding.

Staff Football Activity As part of its continued support of employees’ activities for healthier lifestyle, the Company offered a

football playground for the employees to get together after the working hours and exercise football

each Saturday.

393

Tenth AnniversaryOGC celebrated the 10th anniversary of its operations under the auspices of H.E Mohammed

bin Hamad al Rumhy, Minister of Oil and Gas. It was also an occasion to benchmark the

Compnay’s long journey in powering the nation and the Omani community with reliable

natural gas. The event was attended by officials from various government bodies, OGC board

members, and the employees.

A video film depicting the Company’s profile, milestones, facilities, modern technologies,

work environment, and employees, among others, was played to commemorate the occasion.

Appreciation gifts were given away to the employees to mark the anniversary. Branded

backdrops and dropdown banners have been installed in the Head office building and

reception areas and at the regional offices to compliment the 10th anniversary.

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HEALTH, SAFETY AND ENVIRONMENT

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The goal of all occupational safety and health programmes is to foster a safe work environment.

It also involves protection of co-workers, family members, employers, customers, suppliers,

nearby communities, and other members of the public who are impacted by the workplace

environment.

Due to the growing concern for ecological preservation, there is also increased awareness to

protect the environment and eco-system from pollution and degradation. It is a reflection

of the essential value systems adopted by a company or entity in its managerial systems,

personnel policy, principles for participation, training policies and quality management.

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331 Safe Days

7,474,603Kilometres

Previous Record maintained after the last LTI (15 June 2010) up to the Fatality (12 May 2011)

1,882,767Man-Hours Free from LTI

201Safe Days

2,736,063Kilometres

Continuous Record maintained after the Fatality (12 May 2011) up to the end of December 2011

OGC’s overall safety performance for the year 2011 was within the set targets except for a fatality accident

involving the personnel of a contractor in a road traffic accident on 12 May 2011.

The fatal accident broke the record of 4,529,354 man-hours free from Lost Time Injury (LTI); 331 Safe

Days and 7,474,603 kilometres driven free of accident that was maintained from 16 June 2010. After the

fatality accident on 12 May 2011 until the end of December 2011, OGC has been maintaining the record of

1,882,767 man-hours free from LTI; 201 safe days and 2,736,063 kilometres driven free of accident.

Combined (OGC & Contractors) total man-hours worked in 2011 was 3,478,477 hours. OGC man-hours

contributed 13 per cent to the total, while contractor man-hours contributed 87 per cent.

Combined Lost Time Injury Frequency Rates (LTIFR) is 0.29, far below the set target of 1.00.

4,529,354Man-Hours Free from LTI

1MF

42

2,600,000

2,400,000

2,200,000

2,000,000

1,800,000

1,600,000

1,400,000

1,200,000

1,000,000

800,000

600,000

400,000

200,000

0

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC DEC’

403,083 353,303 382,848 329,293 320,653 309,773 301,942202,267

205,968 191,310 154,479 146,245

0.33

0.62

0.29

0.56

3,478,477

1.00

0.80

0.60

0.40

0.20

0.00

Man

-hours

LTI Fr

equen

cy R

ates

Dec’ 2011 YTD Combined (OGC & Cont) - Manhours & LTIFR

OGC-Manhours Contractors-Manhours OGC-LTIFR

Contractors-LTIFR Combined LTIFR Combined LTIFR-Threshold

3.00

2.80

2.60

2.40

2.20

2.00

1.80

1.60

1.40

1.20

1.00

0.80

0.60

0.40

0.20

0.00

Fatality LTIF TRCF RTAF ROAF TOIF

0.00

1.00

1.00

3.00

3.00

2.00

0.29

0.29

0.29

0.29

0.00

0.00

Incident Rates - KPI 2011

Target-Combined Frequency Rates 2011

Actual-Combined Frequency Rates Dec’ 2011 YTD

Fatality

LTIF

TRCF

RTAF

ROAF

TOIF

434

The OGC Journey Management Rate (JMR) for each operating region is well maintained below the target.

JMR (OGC only)

Target 2011

Actual Dec’ 2011

Dec’ 11 YTD Cumulative JMR

The QHSE Department in 2011 participated and supported the Company’s business in many areas and aspects. The

process of ISO 9001:2008, ISO 14001:2004 and OHSAS 18001:2007 certification was initiated.

New quality procedures were developed such as corrective and preventive action procedure, deviation control

procedure and updated all mandatory quality procedures such as document and record control procedures, internal

audit procedure, quality manual etc.

MUSCAT

SOHAR

FAHUD

SALALAH/NIMR

5.50

9.50

7.00

8.00

1.35

5.76

5.72

4.25

1.91

6.13

4.25

4.16

Journ

ey M

anag

emen

t Rat

es

0 2 4 6 8 10

44

In the modern corporate culture, employees are viewed as assets to the enterprise, whose

value is enhanced by development. OGC considers its people as the most important and

precious asset it possesses and chalks out programmes and policies for their welfare.

In line with OGC’s philosophy in job enriching and enhancing competencies with fair chance

to all, training and staff development programmes were implemented based on closing

identified competency gaps with more emphasis towards technical disciplines and better

working environment. On the job training sessions were conducted through specialized

vendors for all new projects that require certain level of professional working standards.

The Company continued to face challenges through competition in the local labour market

from Oil and Gas Companies in attracting and retaining staff. However, despite this market-

driven factor, the Company managed successfully to attract high level of new employees

HUMAN RESOURCES

he C

44

454

in various technical fields and in other supporting departments. Emphasis

was on skills in operating new compressor stations, gas supply stations and

other facilities and managed to minimize employee’s turn over to minimum

levels.

OGC embarked on improving working policies and employees’ procedures by

revisiting the current policies in various employee working practices. There

were also extra efforts in attracting and recruitment of fresh graduates in

various educational levels from high school certificate holders to diploma

holders in various technical disciplines in addition to degree holders in

various engineering specializations that Oman Gas Company perform in,

and in other specializations for the support functions.

With the total number of staff reaching 229 by the end of 2011, the Company

has achieved Omanisation level of 93%. The entire senior management team

is fully Omanised and many departments achieved 100% Omanisation.

Although OGC is a Company of operational nature, the female employee

population has grown to nearly 10%.

46

TAWASUL INTEGRATED ERP SYSTEM IMPLEMENTATION

OGC has achieved substantial progress in its integrated

SAP Enterprise Resource Planning (ERP) System which

aims at automating the Company’s business processes

and ensuring availability of real time information that

are vital for decision making, enhanced productivity,

efficiency and achievement of declared business goals.

The Project, planned in two phases, was kicked-off in mid

of 2011, and is currently in the “realization” Phase for

Phase I, having completed the Project Preparation and

Business Blueprinting phases. Nicknamed “TAWASUL,” it

is an end-to-end Project that aims to fulfill OGC’s vision

of having an integrated ERP system to cater to operational

business needs and enable real-time reporting.

Enterprise Resource Planning (ERP) systems integrate

internal and external management information across

an entire organization, embracing finance/accounting,

manufacturing, sales, service, and customer relationship

management, etc. ERP systems automate this activity

with an integrated software application like SAP. Their

purpose is to facilitate the flow of information between

all business functions inside the boundaries of the

organization and manage the connections to outside

stakeholders.

SAP – which stands for “Systems, Applications, and

Products in Data Processing” – helps companies of

all sizes and industries run better. From back office to

boardroom, warehouse to storefront, desktop to mobile

device, SAP empowers people and organizations to work

together more efficiently and use business insight more

effectively to stay ahead of the competition.

The project was planned in two phases. As part of the

Phase I implementation of TAWASUL, Finance, Contracts,

Human Resources, Procurement, Warehouse and Projects

departments would start using the SAP system by March,

2012. As part of Phase II implementation, Operations,

HSE, SCADA, and Administration would start using the

SAP system by August 2012.

Some of the benefits that the project is expected to

bring to OGC as an organization include:

• Integrate different departments that are now running

on separate (discrete) systems such as SUN Finance,

PACER and Pay Manager on a single SAP system.

• Enable real-time reporting to help management in

swift and informed decision-making.

• Reduce paperwork and shift to a system-enabled

“workflow” method, wherein all requests are initiated

and approved through the system.

• Empower OGC staff to be adroit in the use of business

systems, in par with market leaders and multinational

organizations.

ContractsOGC awarded 38 contracts with a gross value of RO.

11,663,664 through different tender forums in the year

2011. Out of these, contracts worth RO. 10,460,000

(nearly 90 per cent) were awarded to local contractors

depicting OGC’s continuing commitment in supporting

local entrepreneurs.

Others

10.4%

Local Contractors

89.6%RO. 10,460,000

Contracts awarded to local contractors

RO. 311,129

RO. 10,095,709

RO. 1,256,526

Contracts 2011

Major Tender Committee

Government Tender Board

Secondary Tender Committee