Higher oil production strengthens Oman’s public finances
International ratings agency Standard & Poor’s (S&P) has affirmed its ‘A’ long-term and ‘A-1’ short-term foreign and local currency sovereign credit ratings for Oman, based on its strong fiscal position.
The country’s ratings are supported by its solid external finances and increasing wealth levels, S&P says.
“The stable outlook is based on our expectation that the high level of government assets, the expected increase in LNG exports, and the growth of the non-hydrocarbon sector will continue to mitigate concerns stemming from the volatility in oil prices and the recent years’ decline in crude oil production,” says S&P.
Oman’s oil production declined steadily from a peak of 970,000 barrels a day (b/d) in 2000, but its current enhanced oil recovery (EOR) techniques are helping to reverse the trend temporarily.
Oman produced an average of 812,500 b/d of oil in 2009 compared to 756,800 b/d in 2008, an increase of 7.4 per cent, according to data from Oman’s national economy ministry.
The ratings remain constrained by a heavy economic dependence on hydrocarbons, geopolitical tensions in the region, and in the longer term, the lack of clarity about the succession of current ruler Sultan Qaboos bin Said.