According to the Middle East projects tracker MEED Projects, Oman has more than $13bn-worth of planned projects in sectors as diverse as petrochemicals, refineries and metals.
The sultanate has done an admirable job at reversing its declining oil production and is now searching for ways to use the additional petrodollars to increase employment opportunities for its citizens.
The one major stumbling block for Muscat in its ambitions to increase refining capacity and encourage investments in heavy industry is an acute shortage of gas.
|Oman projects by sector|
|Source: MEED Projects|
“Of course, gas is the eternal question when talking about increasing metals production in Oman,” says a Middle East steel industry executive. “The gas shortage is a shame, because there are a lot of advantages to doing business there.”
International engineering, procurement and construction (EPC) contractors and engineering consultancies still see opportunities in Oman. Many believe that the recent Arab uprising there will see additional funding released by Muscat to appease Omanis.
“I think that you may see one major project being fast-tracked and gas will be definitely secured for that,” says a senior executive from a major EPC contractor working in Oman. “I would not be surprised if that project was Duqm.”
|Oman plant projects by value|
|Source: Meed Projects|
The Duqm refining and petrochemical complex is a $7bn Oman Oil Company and the Abu Dhabi-owned International Petroleum Investment Company (Ipic). The capacity of the complex has not yet been announced, but it is expected both facilities will be world-class when completed.
The project is currently at the feasibility stage with the front-end engineering and design and EPC phases due to be implemented over the next 18 months.
“People are talking about the Duqm project more and more,” says the EPC executive. “Contractors are starting to believe that it will go ahead now, which is more than they did a year ago.”
Other projects that are definitely going ahead includes the $400m Shadeed iron & Steel plant phase II and the $300m Sohar refinery upgrade.
Despite these encouraging signs, MEED Projects still has more than $6bn-worth of Oman refining petrochemicals and industrial projects listed that are on hold, the majority being petrochemicals that lack both a gas allocation and the requisite financing.
There is no doubt that Oman has got an infrastructure in place that can sustain major industry and its geographical location is superb with its close proximity to international shipping lanes as well as key developing markets, such as India.
Muscat knows it has only got about 40 years of major oil production left before its fields start to deplete. In that time it needs to have a diversified economy that matches its infrastructure, otherwise it is going to find itself in serious trouble.
“I wouldn’t write off Oman just yet,” says the EPC executive. “Omanis know what they have to do and with time we will do it.”