In-Country Value in Oman: From Procurement Policy to Long-Term Economic Capability

For many years, In-Country Value, or ICV, has been an important part of Oman’s approach to developing its energy and industrial sectors. At its simplest, ICV is about ensuring that a greater share of economic activity generated by major projects remains within the Sultanate.

But its strategic purpose goes much further.

ICV is not only about where a company purchases a product or service. It is about creating sustainable national capability through local procurement, employment, skills development, manufacturing, investment, supplier development and knowledge transfer.

As Oman continues to advance the objectives of Oman Vision 2040, the role of local content is becoming increasingly important. The national agenda is progressively focused on strengthening Omani industries, improving the competitiveness of local businesses and ensuring that investment contributes to long-term economic capability.

For businesses operating in Oman, understanding this evolution is essential.

ICV Is More Than Local Purchasing

ICV is sometimes understood mainly as a requirement to purchase goods and services from local companies. Local procurement is certainly a major component, but the concept is broader.

The Ministry of Energy and Minerals defines ICV around expenditure retained within Oman that contributes to business development, human capability and economic productivity. Its framework includes seven areas: fixed-asset investment, Omanization, training of Omanis, local sourcing of goods, local sourcing of subcontracted services, development of national suppliers, and development of national training, education and research institutions.

This broader perspective changes how ICV should be viewed.

A company may import equipment while still contributing significantly to local value by creating technical employment, developing local servicing capability, maintaining inventory in Oman, training Omani engineers or transferring specialized knowledge.

The objective is ultimately to strengthen the economic ecosystem surrounding an industry.

From Procurement Requirement to Economic Strategy

Oman’s energy sector has been one of the major environments in which ICV has developed.

The Ministry of Energy and Minerals established an ICV committee bringing together government representatives and oil and gas executives, supported by dedicated contracting and procurement and human-resources subcommittees. This structure reflects the dual nature of ICV: developing both supply-chain opportunities and national human capability.

ICV plans can also form part of tender submissions, turning local-value commitments into measurable obligations over the duration of contracts. This means ICV increasingly influences how companies structure bids, select suppliers, recruit employees, develop subcontractors and plan investments.

The conversation therefore moves beyond:

“How much can we procure locally?”

towards:

“How much sustainable capability can this contract create within Oman?”

That is a much more strategic question.

Building Stronger National Supply Chains

One of the most significant outcomes of an effective ICV framework is the development of stronger domestic supply chains. Energy projects require thousands of individual products and services, from valves, pumps and electrical equipment to engineering, logistics, inspection, maintenance and specialist technical support.

Historically, many of these requirements may have depended heavily on international suppliers. ICV creates an incentive to examine which capabilities can realistically be developed within Oman.

This may involve local manufacturing, assembly, stockholding, equipment servicing, repair facilities, fabrication or technical support. When local capability becomes commercially sustainable, the benefits extend beyond ICV compliance.

Lead times can shorten. Technical support can become faster. Dependence on international logistics can decrease. Operators can gain greater visibility over their supply chains. In this way, local content and supply-chain resilience increasingly support the same objective.

Creating Competitive Omani Suppliers

Successful localization cannot be based on preference alone. Local companies must ultimately be able to compete on quality, safety, technical capability, reliability and commercial performance.

This is why supplier development is one of the most important elements of ICV.

Providing an Omani SME with a contract may create immediate economic value. Helping that company develop certifications, technical expertise, systems and management capabilities can create value for decades. The objective should therefore be to help national suppliers progress from subcontractors into specialist companies capable of competing for increasingly sophisticated work.

Oman’s Joint Supplier Registration System (JSRS) illustrates the importance of building structured access to procurement opportunities. The system connects Omani and international suppliers with opportunities across the oil and gas sector while providing a common supplier registration and certification framework.

The strongest measure of ICV success is ultimately not the number of local suppliers in a contract. It is how many become stronger businesses because of it.

Human Capital Is Central to ICV

Local value cannot be created sustainably without people. For this reason, Omanization and professional development remain fundamental elements of the ICV framework. However, meaningful localization requires more than increasing employment numbers.

The greater objective is to build capability. Training Omani engineers, technicians, procurement specialists, project managers and skilled tradespeople creates expertise that remains within the economy long after an individual project has been completed.

In highly technical sectors such as oil and gas, energy, manufacturing and industrial services, this development takes time. Companies therefore need to think beyond short-term workforce requirements and invest in structured training, mentoring, certification and career development.

The strongest ICV programmes create a transition from employment to expertise and eventually to leadership.

Local Manufacturing Creates a Multiplier Effect

Manufacturing represents another important stage in the development of ICV. Importing an industrial product creates value primarily through distribution and logistics. Manufacturing or assembling that product locally can create significantly wider economic activity.

It can generate employment, technical expertise, factory investment, local subcontracting, maintenance services and demand for other locally supplied materials. The result is a multiplier effect.

This is why Oman’s wider local-content strategy increasingly emphasizes localization of industries, higher-value processing and stronger national production capability. Oman Vision 2040 reporting has highlighted initiatives including a national local-content framework, mandatory local sourcing mechanisms and opportunities designed to retain greater economic value within the country.

For international manufacturers, this creates an important strategic consideration. The future opportunity in Oman may not always be about exporting more products into the country.

In certain categories, it may be about establishing more capability inside it.

International Partnerships Remain Essential

ICV should not be understood as replacing international expertise. Oman’s industrial economy has benefited enormously from relationships with global manufacturers, technology companies and specialist service providers. The opportunity is to structure those relationships so that more knowledge and capability are transferred into the local economy.

International companies can work with established Omani partners to provide technology, training, manufacturing expertise and specialized products. Local companies contribute market understanding, customer relationships, regulatory knowledge, logistics capability and long-term presence.

When these strengths are combined effectively, the relationship becomes more than representation or distribution. It becomes a platform for capability development.

Measuring What Remains After the Contract

A useful way to evaluate ICV is to ask a simple question:

What remains in Oman after the contract is completed?

If the only outcome is money spent locally during the project, the impact may be temporary.

If the project leaves behind trained professionals, stronger suppliers, manufacturing capability, technical expertise, infrastructure or intellectual capital, the economic impact can continue for years. This is the difference between local expenditure and genuine local value.

The Ministry of Energy and Minerals continues to place increasing emphasis on this wider approach. Recent initiatives under its local-content agenda have focused on locally procured goods and services, national supply chains, investment, innovation, technology transfer and localization of industries and services.

The Role of Companies Like SIMA Oman

For companies operating between international manufacturers and Omani industry, ICV creates both responsibility and opportunity. At SIMA Oman, we believe effective local value creation begins with understanding both sides of the market.

International partners need insight into Oman’s procurement environment, local requirements and customer expectations. Omani customers need access to reliable international technologies, quality products and technical expertise supported by strong local service.

Connecting these two requirements can help turn international supply relationships into sustainable domestic capability. The future of industrial partnership in Oman will increasingly depend not simply on what is supplied, but on what capability is created around that supply.

From Policy to Long-Term Capability

ICV began as an important mechanism for retaining more economic value within Oman.

Its potential, however, is much greater.

When implemented effectively, it can help create stronger suppliers, skilled professionals, local manufacturing, resilient supply chains and internationally competitive Omani businesses. This is where ICV moves beyond procurement policy.

It becomes an instrument for economic transformation. For Oman, the long-term objective should not simply be to increase the percentage of expenditure retained in-country. It should be to ensure that every major investment leaves behind greater national capability than existed before it.

That is the true value of In-Country Value.

SIMA Oman | Delivering Performance. Partners in Growth.