Economic Performance

In-country value

Local delivery has always been key to the way we work – we employ local people, work with local suppliers, and develop local capabilities.

The concept of In-Country Value (ICV) seeks to formalise and quantify the net contribution Petrofac makes to the economies in which we operate.

Across many of our projects, we have started to evaluate our impact. We aim to become more consistent in the way we set and monitor targets and to share the lessons learnt across our business.

Working with local suppliers

Through the procurement of goods and services, we have an important opportunity to contribute to local economies and we always aim to work with local vendors and suppliers. This enables us to meet our contractual and regulatory obligations regarding local resources. It also helps us to reduce costs and enhance relationships with clients and other local stakeholders.

In 2016, we purchased more than US$1.4 billion worth of goods and services on our key projects, more than 44% of which was supplied by vendors located within the country of operation.

For various reasons, the level of procurement that comes from locally registered vendors varies by country. For example:

• Abu Dhabi – more than 75%
• Algeria – 56%
• Saudi Arabia – 54%
• Malaysia – 51%

Supporting local employment

We are working towards gathering consistent data to report how many jobs are created and sustained on our key projects. Our goal is to understand the total number of jobs created, as well as the ratio between expatriate and local workers – to indicate the level of the local content of our workforces.

As of December 2016, we supported over 31,500 jobs at our key project sites – 95% of these were through our subcontractors.

The extent to which these subcontractor jobs are held by local or expatriate employees is dependent on national local content requirements as well as the availability of qualified candidates to fill the required roles. For example, in Algeria the percentage of local subcontractor workers is as high as 80% whereas, in Saudi Arabia, up to 90% of the subcontractor workforce consists of migrant workers.

We continue to work with our subcontractors to understand more fully the make-up of workforces and to improve our reporting in future years.