Oman LNG Interview - Zakwany - A/CFO - Oman LNG
Fast facts: Oman LNG was established by Royal Decree in February 1994 to produce and sell LNG to overseas market. The main shareholders are the Government of Oman 51% and Shell 30% along with six other JV partners. Our corporate head office is in Muscat while the plant is located in Sur.
Oman LNG obtains natural gas from the interior of Oman. The feed gas is supplied through a 360 kilometer pipeline, operated by the Petroleum Development Oman (PDO). When the gas arrives at Oman LNG’s plant in Qalhat it is transformed by a series of processes into finished products - Liquefied Natural Gas (LNG) and Natural Gas Liquids (NGL). The market for our LNG is mainly in the Far East to countries like Japan and Korea. Our NGL is sold locally to be further processed into other useful products.
Total plant capacity is 10.4 metric tonnes per annum (mtpa) produced by three LNG trains.
Type of business: Liquefied Natural Gas (Gas Liquefaction)
Numbers employed: 476 as at end 2012
ACCA members employed: 6
ACCA students employed: 3 Graduates
Why did Oman LNG develop such strong foundations in corporate governance?
The main reason Oman LNG has been developing such strong foundations in Corporate Governance is due to our belief that good corporate governance is critical to our business success and relationship with all our stakeholders. It goes back to our strong belief in Honesty, Integrity, Leadership, Openness and Accountability with a core theme of Trust, Communication and Respect.
The key Corporate Governance principles are embedded in our systems at all levels and practiced by our employees on a day to day basis. This approach has greatly assisted the company in developing the best Corporate Governance system in the country and this has been confirmed by World Finance’s recent award to Oman LNG.
How does having a strong corporate governance focus help you develop your business?
Corporate Governance is all about consistently doing the right thing in the right way. We empower our employees to focus on good corporate governance principles in their day to day activities at very basic levels all the way up. Our well embedded corporate governance structures ensure transparency in our business which provide a platform for trust. Our governance structures also provide our shareholders and other stakeholders with quality opportunities to engage with us positively and share their knowledge, experience and expertise. Through these continuing interactions within well-defined corporate guidance parameters, our stakeholders understand our business direction and are able to provide useful and constructive feedback. We, in turn, are enriched by the feedback we get from a wide range of stakeholders, thereby enhancing our ability to deliver more value and be the best at what we do
What challenges exist for companies in the Sultanate at the moment?
The companies with good corporate governance are usually major contributors to the country’s economic growth, prosperity and sound governance that consistently delivers value to the people. Governance model is an integral element of any country’s sustainable economic growth & development - it is imperative. The real challenges we have in Oman is to further cement our existing good corporate governance practices both in the public and private sectors and take it to the next level. It is worth mentioning that Oman was the first country in the GCC to establish the “Code of Corporate Governance”.
How is the ACCA Qualification (and ACCA qualified accountants) helping you to strengthen your corporate governance?
ACCA qualified accountants working in Oman LNG are pillars and guardians of Oman LNG Corporate Governance system along with other Oman LNG employees qualified in various professions. The ACCA qualification gives an edge and an insight into the principles of strong Corporate Governance, and with the knowledge and skills necessary to put those principles into practice. The ACCA qualification enables the ACCA qualified accountants to further develop sufficient understanding of corporate governance to identify practical benefits that will emerge from the proper and consistent application of these principles. I have also found that ACCA qualified accountants have a clear and informed view on the appropriate corporate governance structures, roles, responsibilities and supporting processes required for effective compliance to corporate governance.
What challenges do you face in the global downturn? How have you had to adapt to continue to be successful?
As you would expect, the challenges and expectations become very steep for CFOs during the global downturn, as in any organization around the world. As a CFO, I needed to quickly adapt and address new needs with the support of my staff and that of the Management Team.
I personally believe in longer term thinking and employee first approach. During a downturn, it is your employees who collectively work together to support each other to overcome such challenges.
During this time, my focus was more on supporting the company in its strategic decisions to ensure that the impact of the global downturn on the company is minimal. In addition, the Finance Department played a key role in supporting individual departments inside our organization to effectively meet these challenges. As a finance team, we supported management by providing right information at the right time whenever they needed and this is central to our ability to support management and shareholders during global downturn. Having a credible base of facts as well as insights into what the numbers mean for the business becomes more important when the market and economic outlook remain uncertain. To help both Oman LNG management team and operational units cope with the challenges posed by a volatile economy, we started spending largest portion of our time working with our colleagues in other departments on optimizing operational and financial performance.
In a nutshell, it is important to have your finger on the pulse of the company’s operations, safety and financial performance at all times.
What does winning the World Finance Award mean to you?
Winning the World Finance Corporate Governance Award means lots to me. The award makes Oman LNG the first company in the Sultanate to ever receive World Finance’s award for Corporate Governance. This could not have been achieved without the steadfast support of the Shareholders, Management Team, Employees and all our other Stakeholders.
As stated by our CEO - Mr. Harib Al Kitani at London Stock Exchange after receiving the award at the presentation ceremony ““We are grateful to Oman’s wise and visionary leader, His Majesty Sultan Qaboos bin Said for his guidance over the years which has enabled our company constantly strive to reach new heights in our effort to contribute to the development of Oman and its people through our business of producing and exporting the country’s natural gas resource”
We would like to take this opportunity to thank the company’s Shareholders, Board of Directors, Buyers of its Cargoes, Contractors and Employees for their support. Our task in the coming years is to make Oman LNG an even more successful company that continues to have the trust of all its stakeholders. We have committed ourselves to be The Best At What We Do.
Finally, how do you see the role of ACCA in developing in the region? Do you think more professionally qualified individuals with qualifications like ACCA will bring a stronger focus on Corporate Governance and other areas relevant to today's business?
I personally see the ACCA playing a positive role in developing in the region. A record number of students have been successful in ACCA exams in the recent years in Oman.
When I completed ACCA in 1990, there were only about 10 ACCA Omani members in Oman. I am very proud to see the current membership has increased significantly with more and more young Omanis pursuing ACCA qualification. I would like to personally thank ACCA institute in the region for helping students to achieve their professional qualification.
With regards to the future, I believe there is a need for more qualified accountants in our region given the overall economic growth and ACCA seems to be the choice for most youths pursuing accounting qualification. The market is competitive and the lesson from the recession around the world means we need more ACCA qualified accountants to ensure strong focus on Corporate Governance and other areas relevant to today’s business.