Oil sector guidelines revised to address genuine layoffs

Employers not compelled to secure new jobs for oilfield workers facing layoff upon conclusion of contracts

Omani manpower redeployment guidelines that were enacted at the outset of the global oil price plunge in 2015, have been tweaked to ensure they only apply to national oilfield workers who face the axe because their employers have been left upended by the downturn.

In a significant departure from the original guidelines, the oilfield industry will no longer feel compelled to take upon itself the task of securing suitable openings for Omani oilfield workers facing redundancy because business contracts signed by their employers are coming to their natural end.

According to Salim bin Nasser al Aufi, Under-Secretary of the Ministry of Oil & Gas, the revised Redeployment Strategy seeks to make the distinction between nationals facing retrenchment as a direct consequence of the low oil price environment, versus those whose employment contracts coming to a natural end.

Explaining the difference, Al Aufi said: ““It is natural for an oilfield contract, particularly a construction contract, to come to an end upon the successful conclusion of the activity or project in question. Sometimes, contracts get renewed or extended, or may change hands. This is the nature of our business, whether in Oman or anywhere else in the world. But when oil prices crashed recently, there were voices claiming that the redundancies were the result of reduced oilfield activities stemming from low prices. This was partly true, but a significant number of the layoffs were the result of contracts coming to an end.”

Since the rollout of the Redeployment Strategy at the outset of the collapse in international oil prices two years ago, an estimated 3,800 Omani oilfield workers have so far been successfully redeployed elsewhere within and outside the are oilfield industry.

Speaking to OPAL Oil & Gas, published by Oman Daily Observer, Al Aufi said the strategy has been amended, of late, to make it less burdensome on the industry, which has had to shoulder the bulk of the responsibility for securing alternative employment for retrenched Omani oilfield workers whether or not the layoffs were linked to the downturn.

“Rather than leave it entirely to the employers and the government to find alternative employment, oilfield workers laid off upon the expiry of a contract would need to shoulder some responsibility and start looking for jobs just like anywhere else in the world,” said the Under-Secretary.

Redundancies, the UnderSecretary argued, have long been a reality of the industry, even when oil prices were at highs of over $100 per barrel. Then, laid-off workers had, among other options, the opportunity to move to the employer’s other activities within or outside the oilfield sector. Those opportunities may have also involved a possible relocation outside of the oil province to other towns and regions where the employer had ongoing business activities.

But, in the wake of the oil price plunge, redundancies resulting from the natural expiry of contracts were often pitched as the malign actions of employers taking advantage of the crisis to lay off workers. While some companies were indeed guilty of laying off Omani workers while retaining large number of expatriate staff, in the main, the job losses were simply the natural outcome of oilfield contracts coming to an end, he pointed out.

What is unacceptable, he said, is the expectation by many national staff that their employers are ultimately responsible for finding them suitable alternative placements upon the expiry of their contracts.

“Yes, we entertained this mindset for a while in the wake of the crisis, but we need to start sending a strong message: You are still accountable to yourself, to develop yourself, to train and nurture yourself, to make sure you are marketable, and to keep your eyes and ears open for opportunities.”

But the private sector is not entirely off the hook, warned Al Aufi . Many companies have been remiss in meeting their Omanisation targets, as well as failing to invest in the training and skills Omani staff.

“It’s simply not acceptable for companies to say that as their contracts are expiring they are letting go of their Omani staff. They should have invested in the recruitment and development of local talent with the goal of replacing their expatriate workers as part of a long-term effort. And if their business grows and they don’t have enough local talent, we will allow them to bring in foreign labour, but with proper succession planning in place,” he further stressed. development of their