The sultanate must establish a sound industrial base before its oil supplies dwindle in 30 years’ time
While many nations in the region have witnessed anti-government demonstrations, Oman has managed to remain stable despite a comparative lack of hydrocarbon resources.
The country produced about 863,000 barrels a day (b/d) in 2010 and, at this rate, has about 33 years of oil reserves left.
The government relies on hydrocarbons for about 48 per cent of its revenues and they make up about 65 per cent of exports. This equates to a large hole in the economy that Muscat is shortly going to have to fill.
The sultanate is taking a number of steps to ensure that its hydrocarbon resources can be fully realised. It has become known for commissioning billions of dollars worth of projects aimed at enhancing oil recovery from its mature fields.
To fill the forthcoming gap in its economy, Muscat needs to establish a sound industrial base before the oil runs out. Industry, however, needs gas, something Oman does not have for domestic use.
The sultanate exports 8 million tonnes a year of liquefied natural gas on long-term supply deals. These contracts are not due to expire until 2024-25, so Muscat needs to source gas from anywhere it can find it. The government obviously knows this and has commissioned a number of gas exploration projects, as well as a deal to import gas from Qatar.
Oman has come a long way since the 1970s, with average per capita income increasing more than 5,000 per cent, from $343 to about $18,000. The hope is that this momentum will be maintained over the next three decades, so the country is more than ready for the day when it pumps the last of its oil.