Adnoc extends In-Country Value programme to target more SMEs
The programme has generated Dh26bn in benefits to the domestic economy
Abu Dhabi National Oil Company extended its in-country value (ICV) programme, which generated Dh26 billion for the domestic economy in 2019 through key partnerships with the likes of oil services firm Schlumberger and real estate developer Aldar.
Total spend on the ICV programme, which incentivises local manufacturing for the oil and gas sector, reached Dh44bn to date, the firm said.
The amount includes spending on local products, manufacturing, assembly facilities, services and infrastructure, which is expected to increase as part of the state oil company's Dh486bn capital expenditure plan over a five-year period, beginning this year.
"In partnership with the private sector, Adnoc will continue to stimulate more commercial opportunities for suppliers, improve the transfer of knowledge within the oil and gas sector and create more private sector employment opportunities for UAE nationals," said Dr Sultan Al Jaber, Adnoc group chief executive and UAE minister of state.
National oil companies in the region, such as Saudi Aramco, have made in-country value generation a key driver to stimulate private sector growth and boost local job creation. Adnoc started its in-country value programme last year with an expenditure of Dh18bn as part of efforts to ensure that local suppliers and companies are engaged across its value chain to boost the domestic economy. Saudi Aramco through its 'In-Kingdom Total Value Add initiative, or IKTVA, meanwhile, looks to increase local content and aims to meet at least 70 per cent of its procurement spending from Saudi companies by 2021.
Adnoc said it would deepen the impact of its programme by launching an initiative targeting small and medium-sized enterprises.
"This initiative will focus on enabling the UAE's SME resources to participate in the growth of Adnoc and the UAE economy," the statement said, adding that it will focus on how to more quickly and effectively integrate SMEs into the oil and gas supply chain.
Schlumberger, the world's largest oil and gas services firm, said on Wednesday it would invest in the training of UAE nationals as part of wider recruitment plans for its business in the country. The company is targeting potential hires of up to 1,000 Emiratis as part of its commitment to Adnoc's ICV programme.
Abu Dhabi-based real estate developer Aldar also signed an agreement with Adnoc on Wednesday to launch its own ICV programme. The developer will look at opportunities to create skilled employment opportunities for UAE nationals in the private sector through the initiative.
"Adnoc's ICV programme has been incredibly successful since its launch in 2017 and Aldar will now extend it into the real estate sector to help drive the growth and diversification of the UAE economy," Aldar chief executive Talal Al Dhiyebi said in a statement.
Aldar's suppliers will be encouraged to develop their own in-country supply chains, driving local investment in assets and raw materials, resulting in the recruitment of "hundreds of UAE nationals", the company said.
Participating in the ICV programme has been an increasing requirement for contractors working across the energy value chain in Abu Dhabi.
Adnoc awarded Dh13.2bn worth of contracts in casing and tubing for drilling activities to three suppliers in August as part of its localisation efforts.
Updated: November 13, 2019 07:46 PM