Oman at a glance
Full Name:  Sultanate of Oman
Capital:  Muscat
Area:  212,460 sq km
Population(m):  3.2 (2013)
Head of state:  Sultan and Prime Minister Qaboos bin Said al-Said
Currency:  Omani rial (OMR)
Religions:  Ibadhi Muslim 75%, other (includes Sunni Muslim, Shia Muslim, Hindu) 25%
Languages:  Arabic (official), English, Baluchi, Urdu, Indian dialects
International organisations:  GCC, UN, IMF, WTO, OIC

Sultan Qaboos bin Said has ruled since 1970 following a coup that deposed his father, Said bin-Taymur. The sultan is also prime minister and head of the foreign and defence ministries.

Oman was occupied by Portugal from 1508 before rebellious tribes drove out the foreign settlers in 1648. These tribes were themselves pushed out a century later in 1741 by various other tribes that were headed by a Yemeni leader. Oman was then invaded by Persian forces a few years later. This was the final time that Oman was ruled by a foreign power.

Oman has long prospered from Indian Ocean trade. In the late 18th century, a newly established sultanate in Muscat signed the first in a series of friendship treaties with Britain. Over time, Oman’s dependence on British political and military advisors increased, but it never became a British colony.

Sultan Qaboos bin Said al-Said has undertaken an extensive modernisation programme, which has opened the country to the outside world while preserving the longstanding ties with the UK.

Economy

Sultan Qaboos bin Said al-Said’s time as the ruler of Oman has been referred to as the country’s renaissance period.

Since taking power in 1970, Sultan Qaboos has presided over a phenomenal transformation in the country’s social and economic structure. The average per capita income has increased more than 5,000 per cent from $343 to reach $18,000 in 2009 and literacy rates have soared.

Oman has succeeded in the privatisation of a series of key assets. Its independent power project programme is well established. It is currently working on doing the same for its electricity transmission networks and it is in the process of selecting a private company to manage its water assets.

But as the renaissance moves into its fifth decade, the question of whether Oman can keep the momentum going is now being asked. The achievements of the past 40 years have been made possible by vast revenues from oil production.

Oil & gas

Enhanced oil recovery techniques have been successfully used to extend the life of the country’s oil fields over the past decade, yet at current levels its reserves will only last for another 17 years. Oil production went into decline in 2001 and has since been restored to about 900,000 barrels a day (b/d). Output was expected to reach 1 million b/d in 2013 and plateau for a while before entering decline again. The use of more complex extraction techniques has also pushed up the cost of production from $7 a barrel in 2005 to $20 a barrel in 2011, meaning less revenue for the government.

Oman has more plentiful reserves of natural gas, with the ratio of proven natural gas reserves to annual production about 36 years at the end of 2011. But the gas sector faces its own problems: easily accessible gas is nearly exhausted and most existing production is tied up in long-term export contracts, while there is high unmet industrial demand for gas. In 2011, Oman’s gas production totalled 26.5 billion cubic metres.

Power & water

Oman faced the tightest power market in the Gulf in the summer of 2011, with electricity shortages only averted by the procurement of temporary power capacity. However, with almost 3,800MW of new capacity under construction as of early 2012, the sultanate’s power problems are largely temporary, especially in the Main Interconnected System (MIS), where no additional capacity is likely to be required before 2017 at the earliest.

In contrast, there is a pressing need for new desalination capacity with four major additions planned by 2018.