OBG talks to Mulham Al Jarf, Deputy CEO, Oman Oil Company

Interview:  Mulham Al Jarf

In what ways can Oman’s recent in-country value (ICV) plan support the development of exports?

MULHAM AL JARF: The ICV initiative is essential to unlocking the potential of Oman’s commerce. It aims to change mindsets in local businesses so that they look for goods and services in the sultanate before importing from abroad. There is also the Made in Oman Index that encourages consumers in Oman to purchase products from the sultanate over lower-priced imports, in order to support local businesses.

By spending money in the country and purchasing products made in Oman, consumers help local companies increase revenue and production so they can better develop their exports. The oil and gas sector has made it a priority to look proactively for opportunities to secure goods and services from local small and medium-sized enterprises (SMEs). In some instances companies even provide SMEs with additional training and support to ensure the quality of their products. This is an investment in the sector’s long-term success, and gives companies the ability to develop themselves and build a bigger network of SMEs that can deliver according to international standards and expectations. This in turn enables them to expand exports.

The goal is to support the development of ICV in the oil and gas sector by assessing the demand and supply markets in Oman, and to drive local supply in accordance with the sultanate’s Vision 2020 plan.

What is being done to encourage the development of downstream petrochemicals, particularly in light of incentives being offered elsewhere in the region?

AL JARF: The most important factor is the Vision 2020 development plan, which aims to diversify the economy and move away from dependence on oil. We are investing to strengthen our position in the global chemicals sector, contribute to Oman’s long-term downstream strategy, provide adequate scope for growth in Duqm’s economic zone and carry out other planned projects in industrial areas of Oman. The jobs created in this relatively uncharted sector, especially by projects of this magnitude, will create a platform for further growth and human capital development.

How is the sultanate looking to use its strategic position on international shipping routes to further expand exports and shipments of oil and gas?

AL JARF: Oman has a long history of maritime trade with the Far East, and now more than ever is the time to capitalise on that. There are great opportunities in Asia because income and consumer demand are rising in emerging economies, most notably in India and China, with China recently announcing plans for a free trade agreement with the GCC in 2014. As part of the midstream energy segment, shipping companies have an opportunity to play a major role.

The sultanate has been a leader in enhanced oil recovery (EOR) technology. Is this paying dividends in exploiting unconventional gas deposits?

AL JARF: Most of the country’s oil reserves are found on shore. However, extracting them from the ground has proved challenging given the terrain and landscape. Oman has addressed this through technological advancement, and is now among the regional leaders in using EOR techniques to maintain its oil output.

This has paid off in recent years. Oil production has risen from 884,000 barrels per day (bpd) in 2010 to about 919,000 bpd in 2012, according to the National Centre for Statistics and Information in Oman, reversing a trend of decline in the early 2000s. By using EOR methods, more of a reservoir's original oil can be extracted than with primary and secondary recovery techniques. There are a number of advantages associated with EOR, such as prolonging the life of a depleting field by up to 30 years when correctly employed, thus saving the cost of finding a replacement. As many fields around the world start to reach the end of their productive life, EOR represents one way to sustain production levels and meet the increasing demand for oil.

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The Report: Oman 2014

Energy chapter from The Report: Oman 2014

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