As an oil producer, Oman’s daily output peaked in 2004 and the sultanate has been trying to keep up ever since.
Maintaining the production of mature oil fields is not easy and, due to unfortunate geological conditions, Oman has become a leader in enhanced oil recovery (EOR) techniques.
The reason this is so important is because the Oman government relies on hydrocarbons for 75 per cent of its revenues.
Such heavy reliance on oil exports leaves Muscat with major question marks as to whether it will be able to sustain the significant investments it has promised since the recent unrest in the country. The strive towards industrial diversification is admirable, but whether enough gas will be available to fuel expansions in the steel, aluminium and petrochemicals industries remains unclear. Oil is being used as the driver for change and Muscat knows it has about 30 years of reserves to put a long-term sustainable alternative in place.
Many positives can be taken from the oil industry in Oman and applied to other sectors. It is well run and has a relatively streamlined management structure. Strategic alliances with international players have been formed and it has embraced the EOR technology that has placed it at the forefront of research and development. A similar strategy across other industries would lay solid foundations for Oman’s future. Muscat has three decades to do it – the clock is ticking.