The energy sector in Oman has continued its familiar pattern of adapting and evolving within a context of uncertain economic conditions and a rapidly changing global energy landscape. Becoming a leader in the development of enhanced oil recovery (EOR) techniques has allowed it to maintain high production rates and ensure oil retains its position as the country’s primary economic contributor. At the same time, major gas discoveries and the launch of a series of big-budget projects have significantly raised its profile as a producer and exporter of gas and gas products. Notably, government incentives are encouraging industry heavyweights to implement renewable alternatives in the extraction of oil and gas where possible, both as a means to preserve gas stock and reduce the sector’s carbon footprint.
Further downstream, an economy-wide push towards manufacturing and value-added processing is manifesting though a series of high-profile refining and petrochemicals projects, namely the recently completed Sohar Refinery Improvement Project and the Duqm Refinery and Petrochemicals Complex under construction. In terms of investments, the country’s carefully maintained multi-lateral diplomatic policy continues to meet with success, with China, Qatar and Kuwait among those countries committed to large-scale projects.
Structure & Oversight
All on- and offshore hydrocarbons resources contained with Oman’s territory fall under the remit of the Ministry of Oil and Gas (MOG), which makes decisions regarding the exploration and exploitation of resources, and puts blocks of territory, known as concessions, up for tender to hydrocarbons companies. The MOG comprises six directorates, each responsible for a different area of work: planning and studies; exploration and production (E&P); petroleum industries; petroleum investment management; marketing; and administrative and financial affairs. In December 2018 responsibility for policy-making in the power sector shifted from the Public Authority for Electricity and Water to the MOG, in line with government aims to streamline the energy and power-generation sectors. While the integration process was still ongoing as of December 2019, its two key premises are the coordination of all electricity sector policy guidance with the MOG and recognising the ministry’s enhanced role as the sole active representative of the power sector in the deliberations of the Council of Ministers. According to the Authority for Electricity Regulation, the merger process has had no impact on power sector operations on the ground (see Utilities chapter).
There is currently no dedicated regulator for renewable energy in Oman, with policies pertaining to the development of green energy thus far created jointly by the National Programme for Enhancing Economic Diversification (Tanfeedh), the MOG, the Authority for Electricity Regulation, the Oman Power and Water Procurement Company, and the Ministry for Environment and Climate Affairs.
Sector policy is guided by the National Energy Strategy (NES) 2040. Published in 2015, it looks to increase the proportion of non-hydrocarbon fuels in power generation, with the target of having at least 10% of electricity output from renewables by 2025 and up to 3000 MW of coalfired power plants by 2030. Since its publication, however, Oman has increased targets regarding green energy, with Tanfeedh modifying its target to 11% of electricity output from renewables by 2023 in the wake of 2018’s Energy Lab, a government workshop through Tanfeedh aimed at supporting Oman’s economic diversification goals.
Public and private sector cooperation is fundamental to the power industry. Royal Dutch Shell and France’s Total are founding shareholders of the government-led Petroleum Development Oman (PDO) and have been operating in the country since the 1930s. PDO is the largest stakeholder in Oman’s oil reserves, operating the largest block, Block 6, and holding responsibility for more than 70% of crude oil production. The government has a 60% ownership stake in PDO, while Shell (34%), Total (4%) and Portugal’s Partex (2%) also own stakes. PDO similarly accounts for most of Oman’s natural gas supply, the distribution and transmission of which is managed by the Oman Gas Company (OGC), a joint venture between the MOG (80%) and the Oman Oil Company (OOC, 20%), and one of nine companies under the newly formed OQ. Oman Liquefied Natural Gas (Oman LNG) operates the country’s LNG activities via three liquefaction trains in Qalhat near Sur, and is owned by a consortium of the government, Shell and Total.
US E&P company Occidental Petroleum (Oxy) is the second-largest operator after PDO and has the largest presence of any foreign firm in Oman. Oxy Oman, the local subsidiary of Oxy, operates mainly in the north of the country at blocks 9, 27, 30, 51 and 62; at Block 65 jointly with OOC E&P; in central Oman at Block 72; and in the Mukhaizna Oil Field at Block 53 in the south. Lebanon’s Consolidated Contractors Energy Development operates Blocks 3 and 4 with a 50% stake alongside Sweden-based Tethys Oil (30%) and Japan’s Mitsui Oil Exploration (20%). Daleel Petroleum, which is a 50:50 joint venture between Omani private company Petrogas E&P and Chinese state -owned firm China National Petroleum Corporation (CNPC), operates Block 5.
The government-owned OOC was formed in 1996 to pursue investment opportunities both inside and outside the sultanate. Oman Oil Refineries and Petroleum Industries Company (ORPIC) was then created in 2011 to nationalise the downstream segment, and has been the government’s most important downstream operator since. ORPIC controls the country’s refining activities through ownership of the refineries at Sohar and Mina Al Fahal, as well as ownership of a polypropylene plant and an aromatics factory.
In November 2018 the OOC and ORPIC announced plans to merge operations, with a new organisational structure released in early 2019 following the appointment of Musab Al Mahruqi as group CEO. In December 2019 the company announced its new branding as the Oman Oil and Orpic Group (OQ), consisting of nine companies split into two business lines: upstream and downstream. The former is responsible for upstream and midstream operations, including those under the purview of the OOC, Oman Oil Company Exploration and Production (OOCEP), the OGC and Salalah Liquefied Petroleum Gas. Meanwhile, operations at ORPIC, Duqm Refinery and Petrochemical Industries Company, Salalah Methanol Company, and ORPIC Group subsidiaries Oxea and Oman Trading International are under the purview of the downstream business line. OQ also holds investments in petrochemicals and refining developments, and metal and mining through shares in companies including Oman India Fertiliser Company, Minerals Development Oman and Sohar Aluminium Company.
Geologically, Oman is divided into several regions and is home to a collection of complex ecological features. The principal gas fields are located in a north-central region known as the Ghaba salt basin, while discoveries of exploitable petroleum deposits have been made throughout the interior of the country. In addition to this, there is the Lekhwair oil field in the north-west, part of the Fahud salt basin, while the South Oman salt basin also contains a number of oil fields. The first finds were made by PDO in the town of Yibal in the Fahud region in 1962, in what is now the 90,874-sqkm Block 6 concession. Block 61 lies in the middle of this, home to the major Khazzan gas field that is currently under development by BP, OOCEP and Malaysia’s Petronas. Other primary hydrocarbons sites include the Mukhaizna oil field, which contributes around 13% to the sultanate’s entire oil output.
The complexity of Oman’s geology often makes for technically challenging and higher-cost extraction than in more straightforward geological contexts. Fields tend to be small with tight reservoirs and low permeability at depths of up to 5000 metres. As a result, since the early 2000s the government has looked to joint ventures with international players that have expertise in EOR techniques, which primarily comprise gas injection, thermal injection and chemical injection. Such partnerships have proven successful in buttressing oil production. In the case of Oxy, for example, a major steam flood project helped increase output at the Mukhaizna oil field by more than 1500% between 2005 and 2015. “The low productivity of some oil fields is due to natural depletion or very old assets,” Chris Breeze, former chairman at Shell Oman, told OBG.
Other EOR techniques include using polymers to increase the effectiveness of waterfloods and harnessing solar energy to power operations. “EOR is a hot topic in Oman and the GCC region,” Abdullah Al Hady, managing director at Abraj Energy Services, told OBG. “Oman is a pioneer in this field and a leader in polymer injection, despite not having the same scale of reservoirs as other GCC countries.”
Size & Scope
Oman is the largest oil and natural gas producer in the Middle East outside of the Organisation of the Petroleum Exporting Countries (OPEC), and as of September 2019 was pumping 900,000 barrels per day (bpd) of crude, according to Mohammed Al Rumhi, the minister of oil and gas, in line with production cuts agreed to by a number of OPEC and non-OPEC member states.
According to an MOG announcement made in March 2019, Oman’s proven oil reserves increased by 51m barrels in 2018, from 4.74bn to 4.79bn barrels, while proven gas reserves rose by 960bn standard cu feet (scf) to reach 23.93trn scf. Estimates on the full extent of the sultanate’s hydrocarbons stock vary, however, with BP’s “Statistical Review of World Energy 2019” report estimating that Omani territories contain approximately 5.4bn barrels of oil and 23.5trn scf of gas.
An increase in global oil prices contributed to nominal GDP growth of 12% at current prices in 2018, with hydrocarbons GDP expanding at a rate of 37%, according to the 2018 annual report from the Central Bank of Oman (CBO). This was in line with an increase in the average price of Omani oil, which averaged $69.70 per barrel in 2018 versus $51.30 per barrel in 2017. Oman’s exported crude is the basis of a major trading classification, DME Oman, which is listed on the Dubai Mercantile Exchange.
Increasing hydrocarbons exports – along with a moderation in imports – contributed to a decline in the current account deficit, which fell from OR4.2bn ($10.9bn) in 2017 to OR1.7bn ($4.4bn) in 2018, the CBO noted. According to the National Centre for Statistics and Information (NCSI), Oman’s petroleum activities contributed nearly OR12bn ($31.2bn) to GDP in 2018 and accounted for 39% of the sultanate’s total economic activity for the year. This is compared with OR19.5bn ($50.6bn) for non-petroleum activities that same year.
In an international context, Oman’s oil export revenue stood at $22.5bn in 2018, or 1.96% of the global total. Oil production including condensates comprised 1.1% of the international total in 2018, at just over 1m bpd, up around 4% from 958,900 bpd in 2017. According to the NCSI, Oman produced 1.62m scf of natural gas in 2018, representing an increase of 11.8% on 2017.
Accounting services firm KPMG noted that the oil revenue forecast in the government’s 2019 budget was 9% less than the corresponding figure in the sultanate’s ninth five-year plan, which runs from 2016 to 2020, falling from OR6.02bn ($15.6bn) in 2018 to OR5.47bn ($14.2bn). One reason for this was that calculations used in the ninth five-year plan used a projected oil price of $60 per barrel, compared with $58 barrel in the 2019 budget. Gas revenue, by contrast, was budgeted 1.5% higher than in the plan, up from OR1.95bn ($5.06bn) to OR1.98bn ($5.14bn) in 2019.
When compared with the 2018 budget, the government expects revenue from oil and gas to grow by 10% in 2019, rising from OR6.78bn ($17.6bn) to OR7.45bn ($19.3bn). At the same time, public spending on oil and gas was budgeted to increase by 6% over 2018, from OR2.1bn ($5.45bn) to OR2.23bn ($5.79bn), which represents around 17% of total expenditure in 2019. Oil and gas is a major source of government revenue, accounting for 74% of revenue in 2018. While revenue generated from gas is increasing, oil remains the industry’s dominant source of revenue, with oil and gas contributing 54% and 20% of government revenue, respectively.
Oman has a diverse upstream industry characterised by cooperation among international oil companies, government-funded entities and smaller local players. Under the 2011 Oil and Gas Law, concessionaires typically sign an E&P sharing agreement (EPSA) with the MOG. This does not apply to PDO, which is a cost company making cash calls to its shareholders. Its Block 6 concession agreement runs until 2044. An EPSA usually begins with a threeyear exploration period, followed by a renewable production term of 15 years. The agreement typically covers cost-recovery and production-sharing schedules, with separate versions in place for crude oil, natural gas and condensates. Under the terms of gas agreements, all production must be sold directly to the government, while oil and condensate may be sold on the open market.
According to Andrew Sutherland, technical director at oil and gas E&P company Hydrocarbon Finder, there has been some talk of deregulating the sale of gas. “This would be good news for us, because we have a lot of gas potential,” he told OBG. “The challenge with big gas projects is that the facilities and pipelines are expensive, so you need large-scale, long-term contracts to justify them. As such, any changes that create more marketing opportunities would be good for the segment,” he added.
Concessionaires are also subject to taxes. In February 2017 a royal decree raised the standard corporate tax rate from 12% to 15%, while the income tax rate for oil and gas firms operating in Oman remained at 55%. In addition, the minimum tax threshold of OR30,000 ($77,900) was scrapped.
A number of greenfield and brownfield projects are ongoing in the upstream segment, including the Mabrouk field in the country’s north-east, holding an estimated 4trn scf of gas and 112m barrels of condensate; an integrated (upstream and downstream) gas project in the Greater Barik area; and the Ghazeer development phase at the Khazzan-Makarem gas field. Italy’s Eni signed two EPSAs in 2019, relating to Block 47 and Block 77; Shell Oman signed an agreement for Block 55; and Mazoon Petrogas renewed its EPSA for the Block 5 concession in the country’s north-west (see analysis).
The MOG’s latest licensing round was held between February and May 2019, with the ministry accepting proposals for parties interested in Block 58, Block 70, Block 73, Block 74, Block 75 and Block 76. All but one – Block 70, in the centre of Oman – are in the south of the country, in an area previously part of Block 6. While still maintaining large-scale operations in Block 6, PDO was required to relinquish these blocks due to statutory licence rules. Block 70 is the only one of the concessions that contains proven reserves, namely a Shuaiba formation heavy oil accumulation at the Mafraq field. Despite sizeable interest, the MOG only received proposals for two of the blocks, and was discussing the terms of agreement as of November 2019. EPSAs are expected to be signed in the first quarter of 2020. To compare, the previous round of bidding in 2016 saw agreements signed for all blocks. As many as 20 blocks remain open, and the MOG has signalled its willingness to reach one-on-one agreements based on proposals for open blocks received outside of the bidding rounds. The next bid round is expected in 2020.
Oman LNG supplies natural gas liquids (NGL) – a by-product of its gas liquefaction operations – to the OOC and ORPIC. In May 2019 the parties signed a six-year agreement that guaranteed the continuation of the arrangement until 2025. Oman LNG produces around 240,000 tonnes of NGL from its three-train LNG complex in Qalhat each year. This is then delivered to the OOC and ORPIC refinery and petrochemicals complex at Sohar, where it is typically added to the group’s crude feedstock for refining and processing. The OOC and ORPIC Group are looking to build their own NGL extraction plant at Fahud in central Oman as part of the Liwa complex.
Meanwhile, Total is developing an LNG bunkering hub at Sohar, with feedstock provided by its stake in the Block 6 exploration shared with Shell. The hub will involve a small-scale modular liquefaction plant to be built in Sohar Port, which will comprise a 1m-tonne-per-year train with capacity for expansion. The intention is for the centre to provide LNG as fuel to ships at Sohar Port. This is part of larger ambitions to exploit resources in the Greater Barik area of Block 6, projected for commissioning in 2024 at the earliest, though the development of the project depends on the results of initial exploration.
In March 2018 ORPIC launched its $336m Muscat Sohar Product Pipeline and Al Jefnain Terminal. Located in Al Seeb to the north of Muscat, the oil storage and distribution terminal at Al Jefnain has a capacity of 170,000 cu metres and is connected to both the Mina Al Fahal and Sohar refineries by 45-km and 220-km pipelines, respectively. The terminal also transports fuel to the newly renovated Muscat International Airport via a 25-km pipeline. In total, more than 50% of the country’s fuel needs are transported via the Al Jefnain Terminal, and it is estimated that the facility lowers fuel truck movements in and out of Muscat by around 70%.
Oman’s downstream segment has historically been dominated by the OOC and ORPIC, which together manage the country’s major refining and petrochemicals sites, including the two refineries at Sohar and Muscat, and the segment’s largest project under development at Duqm. These entities were integrated in November 2018 following a 100-day consolidation process (see analysis).
Expanding the country’s capacity for refining and petrochemicals production plays into the government’s long-term economic diversification strategy of growing manufacturing and increasing value addition in the hydrocarbons sector. The Duqm Refinery and Petrochemicals Complex is the largest ongoing project in the segment, with a required investment of around $13bn and a final expected processing capacity of 230,000 bpd of crude oil. Aiming to produce light and middle distillates at a high efficiency rate, the refinery’s primary products will be naphtha, diesel, jet fuel and liquefied petroleum gas. The company running the project is the Duqm Refinery and Petrochemical Industries Company, a joint venture between the OOC and Kuwait Petroleum International. Located in the Duqm Special Economic Zone, the project’s anticipated launch date is 2024.
Established in 2006, the Sohar Refinery project has a refining capacity of 206,000 bpd and as of 2019 had required total capital investment of $4bn. Starting with an initial refining capacity of 116,000 bpd, the refinery completed an expansion in 2017. The extension – Sohar Refinery 2 – added crude distillation, vacuum distillation, delayed coker, hydrocracker and bitumen blowing units. By increasing production of naphtha and propylene by 70%, the expansion enables the refinery to respond to Oman’s growing fuel needs, as well as supply base ingredients for ORPIC’s aromatics and polypropylene petrochemicals plants. In May 2019 the Sohar Industrial Port Company and Bahrain’s Mashael Group signed an agreement to set up a $200m bitumen refinery at Sohar. Upon completion, the project will have a refining capacity of 30,000 bpd and be capable of producing 1m tonnes of bitumen per annum.
Opened in 1982, the country’s oldest refinery is ORPIC’s Mina Al Fahal Refinery near Muscat. The facility has a capacity of 116,000 bpd and processes Omani crude to make fuel products, including liquid petroleum gas, diesel, fuel oil and jet fuel.
Further projects to increase refining capacity include a project in Sur, with Shumookh Investment and Services – the investment arm of the wholly government-owned Public Establishment for Industrial Estates, also known as Madayn – said to be looking into launching a $10bn project with a processing capacity of 300,000 bpd. Shumookh is considering a 6.5% stake in the project, which it proposes to establish on a build-own-operate basis.
In comparison to refining, Oman’s petrochemicals segment is more fragmented, and smaller manufacturers operate alongside increasingly popular large-scale integrated refining complexes. One of the largest ongoing projects is the Liwa Plastics Industrial Complex at Sohar Industrial Port. The project started as a joint venture between US-based Chicago Bridge and Iron Company and Taiwanese engineering firm CTCI and was awarded by the OOC and ORPIC in December 2015. It is slated to bring the group’s plastics production from 400,000 tonnes to 1.4m tonnes when it comes on-stream in the first quarter of 2020.
Oman is also a major producer of fertiliser via the Oman India Fertiliser Company (Omifco), an Omani-Indian joint venture in which the OOC has a 50% stake. Two 25% stakes are owned by Krishak Bharati Cooperative and Indian Farmers Fertilisers Cooperative (IFFC). The company’s main facility is the Omifco Fertiliser Complex at Sur, a $968m complex in operation since January 2006. The facility produces 1.65m tonnes of urea and 1.15m tonnes of ammonia per annum. Under the terms of the project, Oman supplies the plant with gas, while separate offtake agreements govern the sale of urea to the government of India and ammonia to the IFFC. In September 2019 it was reported that the company was considering adding a third urea-ammonia production stream and would make a final decision on whether or not to expand the capacity of its factory in the first quarter of 2020.
China continued to be the most popular destination for exports of Omani oil by a considerable stretch in 2018, with the sultanate sending 83% of its exports, or 240m barrels, to the People’s Republic (see analysis). The second-largest destination was India with 21.9m barrels (8%), followed by Japan with 16.9m barrels, or 6%; South Korea (1m barrels, 0.35%); and Thailand (500,000 barrels, 0.17%). All other destinations together accounted for 8.6m barrels.
Oman’s oil export infrastructure is made up of Muscat’s Mina Al Fahal, in operation since 1966, and the Musandam Gas Plant’s offshore terminal, which delivered its first shipment of crude oil in 2016, and is operated and maintained by UAE logistics company Marisol International. Two single-point mooring terminals for oil exports are also envisaged as part of the Port of Duqm, with the Oman Tank Terminal Company contracted to carry out the installations.
As for gas, Oman currently has one LNG export facility at Sur in the north-east. The facility had been running below capacity until supply from the Khazzan gas field came on-line in September 2017. Since then throughput at the facility has increased to 10.4m tonnes per year. Salalah Port is also expected to become a major gas export centre, with the development of the Salalah Liquefied Petroleum Gas project. The $826m project is being developed by the OGC and is expected to export 90% of the LPG produced at the 327,000-tonne-per-annum facility. The remaining 10% will go towards meeting rising domestic demand. According to Nalin Kumar Chandna, CEO of National Gas Company, the Omani LPG retail market is stable, with household demand expected to increase at an average of 3-4% per year.
Oman continues to attract major investment from international oil companies, as seen in large-scale projects such as Total and Shell’s more than $20-bn project pipeline at Mabrouk, and BP’s $16bn Ghazeer update to the Khazzan gas field. Nonetheless, despite Oman’s continued diversification of its energy sector through investments in gas, petrochemicals and renewable energy, in October 2019 global ratings agency Standard & Poor’s confirmed its credit rating for the sultanate at “BB/B”, citing a high reliance on hydrocarbons.
However, this situation could create opportunities for investors, as the government seeks international partners to help reduce expenditure and cut its fiscal deficit. One of the strategies has been to privatise government-owned companies, as already seen in the power sector, where government holding group Nama is selling off a 70% stake in Muscat Electricity Distribution and already sold a 49% stake in Oman Electricity Transmission to a subsidiary of the State Grid Corporation of China in December 2019. Speaking at the World Heavy Oil Congress and Exhibition in September 2019, Salim bin Nasser Al Aufi, undersecretary of the MOG, emphasised the country’s openness to further international investment. “Oman continues to be open for business. The message to international operators is transfer your technology, share it with us and we will extend our support to you,” he said.
Oman is looking to increase the role of renewables in energy production across the board. In March 2019 The Oman Power and Water Procurement Company forecast that renewable energy sources would make up approximately 30% of Oman’s energy mix by 2030, with solar comprising some 21%, followed by wind (6.5%) and waste energy (2.5%). The transition towards a more diversified energy mix has already begun thanks to initiatives in the energy and utilities sectors. These include government schemes to incentivise solar panels on homes for personal energy consumption, large-scale solar power-generation projects and innovative applications of renewable energy in EOR projects by hydrocarbons majors.
The sultanate’s shift towards renewables is also being accelerated by initiatives launched in the wake of 2018’s Energy Lab organised by Tanfeedh. The integration of the power sector into the MOG was one of the outcomes of the labs, but Tanfeedh also set out plans for a rapid expansion of the country’s renewables capacity via proposals for four photovoltaic (PV) solar projects with a total capacity of 1600 MW, two wind projects with 250 MW of combined capacity, two waste-to-energy/biogas projects with 250 MW total capacity and five small-scale solar PV schemes with a combined capacity of 160 MW.
In 2018 PDO announced the launch of a plan to create a new entity called Energy Development Oman (EDO), which would better reflect the company’s expanded energy vision. Raoul Restucci, the CEO of PDO, announced in March 2018 that company executives had recently presented the idea to the board. “We are generating steam, producing water, harnessing power through solar cells installed over car parking areas and have also signed contracts for flare-to-power projects. PDO is doing so many things at a time, sometimes I wonder whether it would be correct to call us merely as an oil and gas firm,” Restucci said. As of December 2019 no finalised plans for the launch of EDO had been announced.
PDO’s pioneering renewables project is the Miraah Solar Project, which harnesses solar energy to produce steam for use in thermal EOR at the company’s Amal oil field in the south of Oman. The first phase, commissioned in February 2018, entails the operation of four blocks with a capacity of over 100 MW, delivering 660 tonnes of steam per day. The project’s second phase had been expected to launch in early 2019, but delivery was delayed due to damage to 20,000 solar panels caused by Cyclone Mekunu in May 2018. Upon completion, the project will have a full capacity of 1021 MW. By replacing gas as the energy source for thermal EOR, solar projects like Miraah play into the sultanate’s policy of retaining gas resources for higher-value industrial applications. Meanwhile, in November 2018 US firm GlassPoint Solar, PDO’s partner in the Miraah project, announced it had come to an agreement with Oxy for a larger solar EOR project in the Mukhaizna oil field. With a total capacity of 2000 MW, the facility will produce up to 100,000 barrels of steam per day.
Oman will also have a utility-scale solar power plant in operation from May 2020 when the 100-MW Amin PV solar plant project comes on-line. Owned by Amin Renewable Energy Company, a Japanese-Omani consortium comprising Japan’s Marubeni, OGC and Bahwan Renewable Energy Company, the plant will provide electricity to PDO’s nearby oil field under the terms of a 23-year power purchase agreement. Amin is a desert area in the south, about 210 km north of Salalah. In September 2019 Enertis, a global consulting and engineering company, was awarded the ownership and engineering contract by Amin Renewable Energy Company. “Oman provides huge opportunities in the area of renewables not just because it is geographically very suitable, but also because there is significant potential and growing demand, as well as infrastructure to support it,” Sami Baqi Al Lawati, technical director at PDO, told OBG.
Other Green Energy
PDO is also moving into wind power generation, with the company announcing a project in the south of the country in 2018. As of September 2019 the design of the project was still being finalised, according to Restucci, who said that monitors had been installed in different locations. It is planned to be close to Marmul, where PDO operates an EOR project. In November 2019 it was reported that Oman’s Rural Area Electricity Company, also known as Tanweer, was planning to develop hybrid solar-diesel independent power production projects in 11 locations in the sultanate.
The sultanate’s energy sector appears to be positioning itself as best it can in an uncertain and fast-changing energy landscape. The shift of its energy mix towards gas appears well timed, with Norwegian energy research and consulting firm Rystad Energy predicting that the country’s natural gas production would surpass oil production by 2023. This would position the sultanate to benefit from rising global demand for cleaner energy sources. Similarly, the large-scale implementation of solar technology in projects like Miraah, Amin and Mukhaizna suggests key sector players like PDO and Oxy are ahead of the curve in transitioning to a less hydrocarbons-dependent future. Upstream, the MOG will be hoping for more finds like the Mabrouk gas discovery, with Eni among the companies on a big E&P push and a number of unexplored blocks still open to proposals. In the downstream segment, the integration of the OOC and ORPIC is likely to be beneficial for the refining and petrochemicals outlook; Mohammed Al Rumhi, the minister of oil and gas, suggested in November 2019 that petrochemicals will be the major focus of the country’s $10bn-13bn in planned energy investment through to 2022. Boosting downstream output will begin with the anticipated inauguration of the Liwa Plastics Industrial Complex in 2020 and continue with the much-anticipated Duqm refinery from 2024.
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