Impact of crude oil price fall on Oman

Oman times today talking about job cuts for expats.Signs of troubled days ahead?

So you've read today's headline news in a leading local daily.

Yes, Oman is hit and it will have its repercussions.

As the story in today's newspaper says, it will be expats who would be hit the hardest - not the locals - of course.

Government projects have all been slowed or stopped entirely depending on how big or small the investments are.

All companies starting from PDO are implementing serious cost-cutting measures. None of these bode well for the future.

Let's hope and pray that the oil prices stabilises first before rising up again. Until then austerity measures would well and truly be in place.

Yes Sumitran,we can only keep our fingers crossed!A friend in Abu Dhabi says there are signs of economic slow down in both Abu Dhabi and Dubai.We are retesting  a new bottom for oil and that might have got business worried

Just to add a few lines,

1-   Shell has not cut a single dollar from the 2015 Budget to PDO. Initially, there had been a plan for a resource decrease, but there ain't any suggestion till date, pertaining to this. Yes, the production will be impacted, but there won't be project stoppage at any stage. The production will be balanced.

2-   The mostly affected sector will be the EPC where there would be a significant job cut in the construction due to low production or probably project delays / holds.

3-   The only fruitful sector this year is going to be EMC where the regular maintenance projects will be commenced without any cost cuttings and will have significant integrity management impacts on the regular projects.

Overall, I don't see a huge impact on the job cut as compared to KSA / UAE and QATAR, however, indeed Oman is hit now and there has to be a preparation for an alternative by expats this year.

Best of luck to all the oil fellas (Including myself )

For any economy which is dependent on oil exports, falling prices is surely a cause for concern. And Oman is no exception. Things will slow down.

Yes, the UAE is a much bigger exporter of oil than Oman and things have already had a negative impact there. But knowing the UAE, they will quickly look at offsetting these issues by looking at new streams to bolster their dipping revenues. Oman, unfortunately does not have very many options open for solutions. Slowing down of mega projects and cutting costs would be the most obvious and prudent step to take, which the government has already initiated.

Job cuts cannot be done with the locals. Once employed and confirmed after their 3-month probationary period, no Omani employee can be "sacked'. Well, they can be, but the procedures are pretty cumbersome and complicated like issuing 3 'notices', etc. Even after all that an Omani employee can go to the Ministry of Manpower and the Labour Court and file a case against the employer saying that he is being victimised and has been sacked unfairly. The law of course would favour the locals. That is the crux of the matter.

So if someone has to be relieved, it would first have to be the expatriates. Sad, but true !

Sumitran,

Is there a sufficient supply of Omani  engineers,accountants etc with right skills so that  expats can be relieved from their jobs?In such an economic slowdown which category of expats will be most affected?

SAK9 wrote:

Sumitran,

Is there a sufficient supply of Omani  engineers,accountants etc with right skills so that  expats can be relieved from their jobs?In such an economic slowdown which category of expats will be most affected?

Hi SAK9,

Only a very small percentage of locals come with the right educational background and trained and employable skill-sets. The rest have to be necessarily trained and training is certainly not a quick process.

Omanisation to become successful would take a long time. Till such time expatriates would have to continue. If any drastic steps are taken to Omanise the country any more rapidly that what is being currently done, then it would result in the wheels of progress almost grinding to a halt.

In case of an adverse economic downturn, the worst affected would be the entry level expatriates. If an organisation decides to replace a middle-level or a senior-level expatriate employee there would be no suitable local available who wold be able to take on those responsibilities.

And all such available local candidates would already be well-settled with either the government or with the oil and gas sector - the 2 most preferred sectors where the locals prefer to work.