Despite having some of the highest oil production costs in the region, Oman is showing no signs of slowing investment in its hydrocarbons sector.

That was the message as oil executives and journalists gathered in Muscat in mid-April for the latest news on the sultanate’s oil sector.

Oman’s leading oil producer, Petroleum Development Oman (PDO), assured the oil sector that all investments could be recapped if oil prices remained above $20 a barrel.

However, Oil & Gas Minister Mohammed al-Rumhy conceded it is no secret that the current oil prices will make it difficult for Oman to sustain its budget in the coming years.

The sultanate reported a marginal drop in both oil and gas production, but expects a 4 per cent increase in crude output in 2015 to 980,000 barrels a day (b/d) as new upstream developments come on stream.

Oman does not have the wealth of easy production assets enjoyed by its oil-exporting neighbours in the Gulf, and has increasingly relied on enhanced oil recovery (EOR) technology to extract more from its maturing oil fields.

Although Muscat will find it more challenging to weather the current lower oil prices, it does not want to risk underinvestment in its assets should crude rise again in the coming years.

Al-Rumhy was critical of Saudi Arabia’s strategy to maintain its oil market share, which has contributed to the global oversupply, causing prices to fall.

But Oman is not a member of oil producers’ group Opec and there is little the country can do other than attempt to lower costs and maintain the EOR-driven recovery in its oil and gas sector.

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