No labor layoffs in the Omani oilfield sector as of now

Muscat: Omani Ministry of Manpower has made timely interventions so far to avoid mass redundancies in Oman’s oilfield industry, which is bracing for sizable spending reductions in the wake of a dramatic drop in the international oil prices.

According to the head of the Oil & Gas Sector Labour Union (OGSLU), companies threatening layoffs of Omani workers are being made to stay the course for a little longer until alternative possibilities can be discovered.

“There are companies notifying the Ministry of Manpower of their plans to reduce their employee numbers, cut salaries, or shut down altogether because of the (downturn), but after discussions with the Ministry, they decide to pull on for a while,” Said Ahmed al Mahrouqi, Chairman – Oil & Gas Sector Labour Union said. “Often, we are alerted by the employees themselves, following which we seek the intervention of the Ministry, which then obtains pledges from the companies to continue working for the time being.”

Dropping oil prices, which have seen Oman’s crude benchmark fail almost 60 percent of its value since the start of the year, is threatening upheaval in the Sultanate’s Oil & Gas industry. Already, a number of leading players, most notably Petroleum Development Oman (PDO) – the biggest producer of hydrocarbons in the Sultanate – have informed contractors of their plans to scale down expenditure.

Al Mahrouqi said the threat of layoffs is likely to materialize if oil prices do not bounce back quickly enough. “In terms of job losses, the situation is generally under control for now, but we don’t know what is in store in May and after Ramadhan. If oil prices do not recover sufficiently, then we have reason to worry.”

The Supreme Committee overseeing Oman’s response to the novel coronavirus (COVID-19) pandemic has made it feasible for private companies to negotiate salary cuts for Omani staff during the period of the lockdown, subject of course, to final consent from the Ministry of Manpower. Expatriate labor considered excess can be laid off after their earned entitlements are fully relieved.

Contractors that have no work in hand are being urged to ‘redeploy’ their national staff to other contractors under the provisions of Article 48 of the Omani Labour Law, said Al Mahrouqi. ‘Redeployment’ – a widely used option to avoid decrease during the last oil price collapse in 2014 – 2015 – can help Omanis relocate to other employees, albeit with slightly modified terms and job engagements.

“We are working with the Ministry and with the Oman Society for Petroleum Services (OPAL) to help resolve manpower issues in the oilfield sector. Our goal is to safeguard jobs,” he stated.