Oil, Gas Can Promote Oman Economy

Oil, Gas Can Promote  Oman Economy
Oil, Gas Can Promote  Oman Economy

With oil and gas production accounting for about half of Oman’s gross domestic product (GDP), the energy sector plays a crucial role in the sultanate, not only as a source of government revenues but also as an employer of Omanis and a provider of knowhow and technology.

Oman’s oil and gas sector will have to play an increasingly prominent role in addressing some of the sultanate’s most pressing challenges including creating greater in-country value (ICV), supporting the development of small and medium enterprises (SME), and fostering innovation and human development as part of a broader strategy to transform the country from a hydrocarbon-based economy into a sustainable, knowledge-based one, according to a report by the Gulf Intelligence.

Thus, local and international oil and gas experts will debate ways of tackling the challenges the sultanate is confronted with at this year’s Oman Energy Forum, to be held in Muscat on October 21 under the theme ‘Oman 2014: Global Ambitions, Critical Local Challenges’.

“It is critical to address the issues of in-country value, human capital, innovation and SME with a sense of urgency as the country moves ahead with the implementation of its development plans,” Eng. Isam Al Zadjali, CEO of Oman Oil Company said.  At the same time, Oman will have to reassess future allocations of its domestic hydrocarbon resources. The sultanate will have to more than double domestic power generation capacity by 2020 if electricity demand continues to grow at the existing rate of about 10 percent annually, adding significant pressure on the sultanate’s already tight natural gas resources used to fire local power stations and feed domestic industries such as petrochemicals.

Rising energy demand presents Oman with a string of challenges. The sultanate will have to devise a long-term strategy to diversify its energy mix and add alternative power generation sources. In addition, it must continue exploring options to secure reliable gas import channels, while also having to decide on whether or not to let its liquefied natural gas (LNG) export commitments expire in the next decade and forego on much needed revenues to save gas for domestic power generation