Muscat – Oman’s leading construction and contracting firm, Galfar Engineering and Contracting Company, has been awarded a massive contract worth RO280mn by Petroleum Development Oman (PDO).

Galfar shares surged nearly 8% on Sunday at the Muscat Stock Exchange following the announcement of the new contract award by the company.

“We are pleased to inform our esteemed shareholders that PDO has awarded Galfar the Off-Plot Delivery Contract Qarn Alam via a letter of award that was formally accepted by both parties on May 25, 2023, and approval from PDO to disclose was confirmed on Sunday,” Galfar said in a disclosure to the Muscat Stock Exchange.

The company estimates the value of this call-off contract to be approximately RO280mn for an execution period of seven years. The contract also includes an additional three-year extension option worth RO120mn.

“If the extension option of three years is approved and implemented, the potential associated additional contract value is estimated to be RO120mn,” Galfar said.

“We take this opportunity to express our appreciation to PDO for the confidence vested in Galfar through this award,” the company added.

According to Galfar’s first-quarter 2023 financial report, for the period ended March 2023, the company continues to maintain a significant project pipeline of RO481mn supported by new project awards worth RO9.1mn.

“The company expects to maintain a solid project pipeline in excess of RO500mn in the future, with a significant number of tenders under evaluation across a diverse array of sectors and clients. We reasonably expect to be successful in a number of those, which will ensure stability and sustainability of our strong market position,” the company said in the report.

Galfar further said it continues to explore avenues to strengthen the company’s financial position in a challenging and highly competitive economic environment.

“As part of the company’s turnaround strategy, ongoing measures to control manpower and overhead expenses and improve project execution efficiencies are poised to reduce overall cash outflow and improve the operating financial results in 2023,” Galfar said.

As a flagship for Oman’s contracting and engineering business, Galfar said it is looking forward to building on its strength, supporting the government and local market endeavours for economic growth, and pursuing significant development and infrastructure projects across various sectors.