Energy
From The Report: Oman 2013
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Oman may have huge hydrocarbons wealth, but accessing oil and gas supplies has long proved a challenge. More positively, the difficulties associated with exploiting oil and gas reserves – which are dispersed in complex clusters – have made the nation a global leader in advanced hydrocarbons recovery techniques. For international oil companies with the capacity for enhanced oil recovery techniques, Oman therefore remains an attractive destination for investment. This comes as the Ministry of Oil and Gas is redoubling its efforts to maintain and expand crude oil production to meet domestic demand: the expansion of the refining facility at Sohar and the development of a new refinery operation are together set to more than double the output of refined products and open the door to a new export business. This is part of a 10-year plan that outlines spending of $60bn-70bn between 2013 and 2022 on oil exploration and production, and around $40bn on its efforts to exploit gas resources. At the same time, the Sultanate has made an effort to diversify its energy base in recent years, with several new programmes for solar and wind technology in the pipeline.

This chapter includes interviews with Harib Al Kitani, CEO, Oman Liquefied Natural Gas (Oman LNG), and Nasser bin Khamis Al Jashmi, Undersecretary for the Ministry of Oil and Gas.

Articles from this Chapter

Overview

Balance of power: The industry is looking to both expand and transition to advanced methods and technologies
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The Gulf is often synonymous with “easy” oil, massive reservoirs that sit invitingly on Jurassic or Cretaceous shelf limestones. Oman’s hydrocarbons wealth, however, has proven a more challenging proposition. Dispersed in complex clusters, the difficulties associated with exploiting the sultanate’s oil and gas reserves have made the nation a global leader in advanced hydrocarbons recovery techniques. Nevertheless, Oman is the leading regional non-Organisation of Petroleum Exporting Countries…

Interview

OBG talks to Nasser bin Khamis Al Jashmi, Undersecretary, Ministry of Oil and Gas
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Interview: Nasser bin Khamis Al Jashmi How is policy being shaped to increase in-country value (ICV) and procurement of local goods and services in the oil and gas sector? NASSER BIN KHAMIS​AL JASHMI: ICV has become a key policy for the Ministry of Oil and Gas. An ICV committee, which consists of the heads of upstream and downstream oil and gas operating companies, is now dedicated to this. The goal is to create ways for policy and regulations to increase the revenue remaining in-country…

Interview

OBG talks to Harib Al Kitani, CEO, Oman Liquefied Natural Gas (Oman LNG)
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Interview: Harib Al Kitani What is being done to ensure that natural gas requirements for large-scale utilities and industrial projects have adequate feeder stock? HARIBAL KITANI: It is evident that gas has become increasingly important – and an official priority – in Oman. The government has invested a lot of time and capital in the upstream area to achieve the sustainability of the gas and LNG sector. Oman has welcomed numerous foreign companies to explore for gas, which has its own…

Analysis

Improving performance: Expanded capacity will allow for more refined products to be exported
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With 222,000 barrels per day (bpd) of refining capacity, Oman may be struggling to meet domestic demand now, but an expansion of one of the nation’s two refining facilities and the development of a new refinery operation is set to more than double the sultanate’s output of refined products and open the door to a new export business. Sohar Located 200 km north of the capital on the shores of the Gulf of Oman, Sohar’s refinery was brought onstream in 2006 with a capacity of 116,000 bpd. Currently…

Analysis

At all costs: Spending plans keep pace with a rise in unconventional projects
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One of the achievements of Oman’s national economic strategy in recent decades is the successful utilisation of its hydrocarbons wealth to bring about societal development in successive five-year plans. Revenues from the sultanate’s oil and gas industry have been diverted towards health care and education initiatives that have brought about significant improvements. As budgets for the plans are outlined in detail, the breakdown of this spending and its impact can be easily assessed. However,…

Analysis

Developing the workforce: Omanisation has created both challenges and opportunities
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Talk to anybody working in the Omani oil and gas sector and it’s not long before the question of human resources arises. “The reservoirs here are hugely challenging, so the competency gap is a problem, but it would even be a problem in the US or any other market. We need to work with the government to provide adequate training,” Chokri Ben Amor, the general manager of oilfield services provider Schlumberger Oman, told OBG. The complex reservoir structures associated with the sultanate’s hydrocarbons…

Analysis

Potential for continued success: The country’s three major marketing firms have seen healthy growth
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Three major marketing companies take lubricant and fuel products from the Oman Refineries and Petrochemicals Company and distribute them to retail, commercial and aviation customers across the sultanate. The market they share is a fiercely competitive one, but the most recent figures reveal a healthy sector with capacity for growth. First Entrant Shell Oman Marketing Company, established in 1958, was the first of the three to enter the market. It is something of an anomaly within the Shell…

Analysis

Multiple markets: Increasing demand for natural gas as an energy source has created new challenges
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One of the most pressing challenges thrown up by Oman’s rapid development since the 1970s is how to best utilise its energy resources. As with much of the region, in Oman this question is raised most frequently in relation to natural gas – the once-neglected by-product of the oil extraction process that is increasingly in demand as an energy source. Consumption of natural gas in Oman has seen a 180% increase over the last decade, according to the US Energy Information Administration, a rise that…

Analysis

Light of day: Major renewable energy projects are under way across the globe
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The global insolation map has three notable patches: one in western Australia, another in south-west US and the last stretching across North Africa all the way to Saudi Arabia. It is in these regions where the most sun hits the ground, creating the greatest potential for solar energy. The large swatch in the MENA region is of particular interest these days. It runs through countries that are fast-growing and in need of additional sources of energy and new exports. And the virtually untapped solar…

Analysis

Between a rock and a hard place: Fracking is the most efficient method for accessing deep reserves
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The sultanate has a proven track record in the extraction of unconventional oil and gas. Its Block 61 project, undertaken with BP, is one of the most ambitious tight gas drilling projects in the world and, in the view of many in the industry, the technology employed there represents the future of gas production in the sultanate. “In Oman, because of its hydrocarbons clusters, the tight nature of the oil, fracturing makes wells cost effective. All of the gas comes from fracking, and some of the…

Analysis

Boosting industry: Expanding downstream capacity will add value to raw materials
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Stepping up efforts to capitalise on its hydrocarbons wealth, Oman is boosting its downstream industrial capacity by expanding the petrochemicals sector and providing the fuel stocks needed to power other industries. However, the success of this programme still pins much of the country’s economic growth on its oil and gas resources. The petrochemicals industry is a sector Oman has identified as fitting in with its aims of broadening the base of the national economy while at the same time making…