FROM THE GROUND UP

Oman 2016 | DUQM | INTERVIEW

TBY talks to Reggy Vermeulen, CEO of the Port of Duqm, on what is happening at the Duqm megaproject.

Reggy Vermeulen
BIOGRAPHY
Reggy Vermeulen is the CEO of Port Duqm. Prior to his current position he was the PDC’s Commercial Director for three years. Before joining Port of Duqm in 2012, he was the CEO of the port and industrial zone of Haiphong in Vietnam. This location, under his leadership, has attracted over $1.5 billion of investment and has been elected amongst the top five companies in Vietnam. He started his career as a consultant at Deloitte, consulting with a specialization in supply chain optimization and company restructuring.

What are the most recent developments at the Port of Duqm?

The Port of Duqm is experiencing faster and faster growth. Though the project is still under construction, we are not waiting until full completion before activities get started. We have begun the port operation, though it took some time to convince various stakeholders of the use and availability of the port. Now, in 2014 and 2015, we are seeing big changes as we consolidate most of the oil and gas project cargo via the port. This offers two major advantages. The first is that we are within 300km of the main oil fields, which is quite important. Secondly, we are a national port, and most of the large oil and gas project cargo depends on our neighboring port, Jebel Ali, where companies need to risk international pressure. It is always good for companies to be able to rely on their own country's assets for the development of industry. Aside from that, we are seeing more and more interest from international logistics companies to use Duqm as a staging hub for their goods. The port is gearing up for the crucial launch of the next phase of construction, which will take roughly two years to complete. We will have to ensure our cargo transit while we finish construction, as well as consolidate further.

How is the partnership continuing to evolve between the Belgian and Omani government?

The partnership is progressing quite well. We are in a unique situation whereby Oman is part of a 50-50 joint venture. We have the same decision-making powers and power of intervention that the other stakeholders have because we are an equal partner.

What is the impact of key free trade agreements on Duqm?

At this point we are more in the planning stage; once Duqm actually begins full operations, then we will be able to take full advantage of the situation. Today, we are not seeing a huge advantage to having the free trade agreements. However, the mandate of the Port of Duqm is to prepare the country for the post-oil era, and these kinds of agreements, on top of the port's strategic position, will add to the list of reasons to choose the port and its industrial land.

How is the drop in oil prices affecting activities at the port, and how are you adapting to a sustained low price point?

We are not feeling the drop too significantly in day-to-day construction activities. Due to the fact that this is a key project for the country, the government cannot take the risk of slowing it down. Of course, we are erring on the side of caution. The entire value and supply chain in Oman has been asked to reduce costs and the burden on the national budget, so we are all doing our bit to cut down costs to help support the development of the country.

What are the largest challenges for the Port of Duqm?

The biggest challenge we face, with such a large project receiving constant press, is the management of expectations. Unrealistic expectations can often be generated, and we are not spending millions, but billions of dollars on this project. Something of this magnitude does not grow overnight. The difficult part can be closing the gap between expectations and reality, to help people understand that these types of megaprojects take time and do grow out of the ground. Aside from that, we are working on the continuation of the building of the port itself and focusing on fact-finding solutions to speed up the process.