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Meethaq forum highlights support for SME development in oil and gas sector

MUSCAT, 27 October 2015 – Meethaq, the pioneer of Islamic banking in Oman from Bank Muscat, hosted a forum on SME development in the oil and gas sector, with Raoul Restucci, Managing Director of Petroleum Development Oman, as the guest of honour. The event held at the head office of Bank Muscat was attended by dignitaries and key representatives of the leading oil and gas establishments and SME development organisations. Industry experts addressed the forum which spotlighted new opportunities and challenges for SME development in the oil and gas sector in Oman.

In his keynote address, Raoul Restucci noted that the recessionary pressures faced by Oman in the wake of the decline in oil prices was an opportunity to drive change in favour of SMEs, which could serve as the engine of growth to create sustainable employment opportunities for the country's youth. PDO has a robust development programme in place to facilitate sustainable long-term prospects for SMEs, he added. Simplification of processes to help SMEs establish successful ventures is an area that needs to be streamlined in the country, he said. In regard to SMEs, the key priority of PDO is to set the foundation for sustainable employment and productivity, Restucci noted, adding that for the long-term, PDO was focused on creating value beyond oil and gas by diversifying to areas such as water and energy.

Sulaiman Al Harthy, Group General Manager – Islamic Banking, said: “In line with the vision and directive of His Majesty Sultan Qaboos bin Said, Oman is focused on stimulating an entrepreneurial mind-set. Aligning with this national objective, Meethaq is focused on strategic initiatives to complement and add value to the country's progress and development. The bank remains committed to working hand-in-hand with the government and partners to create a favourable environment for SMEs in Oman, especially in the oil and gas sector, which serves as the lifeline of the socio-economic development of Oman."

Al Harthy added: “As the powerhouse of Islamic finance in Oman, Meethaq extends support to all key economic sectors in the Sultanate. With mandates to finance major projects across sectors such as aviation, shipping, agriculture and industry, Meethaq is well-positioned to cope with the challenges faced by the economy and provide the required support for the government and the private sector. The hosting of the forum reiterates Meethaq's commitment to fostering national talent and providing support for SMEs that create meaningful employment opportunities. The role of SMEs is highly important as Oman is witnessing a gradual shift in economy towards SMEs, addressing the requirements of youth representing more than 50 per cent of the country's population."

Azza Al Ismaili, Chairman and CEO of My Edu Zone, led an interactive session with Raoul Restucci in which critical aspects of SME development in the oil and gas sector were explored. Cash flow management was highlighted as a concern of SMEs in view of the delay in payment cycle.

Presentations on SME opportunities were made by Mohammed Ahmed Al Ghareebi, In-Country Value Development Manager, PDO; Dr. Hilal Al Hinai, General Manager – Corporate Services, Orpic; and Janaab Sayyid Mohammed Ali Al Said, President & Group CEO – IBD Group & VEC.   

The SME forum noted that over RO 38-42 billion investments were expected to take place in the exploration and production related activities in the oil and gas industry in Oman during the 10-year period from 2013 to 2022. Of these, the oil sector was expected to attract RO 23-27 billion investments and the gas sector another RO 15 billion. These investments were expected to lead towards additional in-country value (ICV) opportunities of RO 24 billion over the period 2013-2020.

In a presentation, Meethaq highlighted its unique positioning as the perfect Islamic financial solutions partner for the success of SMEs in the oil and gas sector. A panel discussion on building SME capability in the oil and gas sector shed light on business opportunities and challenges faced by SMEs.

Warith Al Kharusi, Executive Director of Al Safwa Group, led the panel discussion as moderator and the panellists included Khalifa Said Al Abri, CEO of Riyada – The Public Authority for SME Development; Mohammed Ahmed Al Ghareebi, In-Country Value Development Manager, PDO; Dr. Amer Rawas, Group CEO – Tasneea Oil & Gas Technology; Ahmed Al Esry, Managing Partner, EY Oman; Hussam Al Nabhani, Vice-President – Corporate & External Affairs, Oxy; Dr. Zaid Al Siyabi, New Ventures Director, CCED and ex-DG, Ministry of Oil & Gas; and Dr. Hilal Al Hinai, General Manager – Corporate Services, Orpic.

Meethaq, under the umbrella of Bank Muscat, is the centre for Islamic financial service in Oman, operating on the principles of Transparency, Trust and Partnership.

As part of continuous endeavor to provide world class services through the latest technology and innovation, Meethaq recently upgraded its core banking system, resulting in a host of cutting edge and first-of-its-kind Islamic banking services covering ATM/CDM, debit card and mobile banking for Meethaq customers.

Presently, Meethaq has 12 branches across the Sultanate and plans to expand the network as well as launch new products and services to complement the unique Islamic banking experience. The bank has invested in staff, systems and controls to ensure the service is delivered in a professional, segregated and fully Shari'a compliant manner. Meethaq offers a full suite of Islamic banking products and services, including savings account, current account, home finance, auto finance, credit card and mobile banking.

Meethaq has adopted the best practices in Islamic banking and finance worldwide to combine a robust model which protects customers and complements the Islamic banking industry. Every Meethaq product goes through the process of Shari'a compliance certification by the Shari'a Supervisory Board and is created in line with the guidelines of the Central Bank of Oman.

Meethaq stands out for its independent Shari'a Supervisory Board, separate capital allocation from shareholders' money, unique risk management tools, complete fund segregation, separate books of account, Shari'a based core banking system, stand-alone Islamic banking branches and proper profit distribution mechanism among investment account holders/depositors. The adoption of AAOIFI standards (Accounting & Auditing Organisation for Islamic Financial Institutions) distinguishes Meethaq Islamic banking practices in terms of standardisation of products and services.