Oman - Oil and Gas Oman - Oil and Gas
Overview
Oil has been the driving force of the Omani economy since Oman began commercial production in 1967. The oil industry supports Oman’s modern and expansive infrastructure, including electrical utilities, roads, public education, and medical services. Lower oil prices over the past few years have pushed firms to improve efficiencies, forcing many market players to reduce their costs. According to a report from the Oxford Business Group, “with fewer wells being drilled, and operators prioritizing cost containment in a low oil price environment, many contractors and oil field services (OFS) companies are finding themselves under pressure to step up efficiency and optimization efforts to lower the cost of production.”
Petroleum Development Oman (PDO), Oman’s largest hydrocarbon producer, has been focused on saving through efficiency initiatives and working with contractors to take out unnecessary costs. According to recent media reports, PDO is reportedly aiming to become a full-fledged energy company over the next decade, encompassing hydrocarbons and renewable energy generation, as well as water management. PDO is already investing heavily in alternatives by using solar power to generate steam for Enhanced Oil Recovery (EOR), which is currently produced by burning natural gas. PDO anticipates that by 2025 more than 23 percent of PDO’s production will come from EOR projects, up from a current 10 percent. As part of an effort to build up local talent, PDO and companies across Oman are ramping up their In-Country Value (ICV) strategy to generate job and training opportunities for Omani nationals, and to promote Omani small and medium enterprises (SMEs).
Oman also has natural gas reserves that may play a leading role in fueling the Sultanate’s industrial growth in the coming years. In 2017, BP announced the production of the first gas from its concession at Khazzan, a tight, sour field. In April 2018, BP and Oman Oil Company Exploration & Production approved the second phase of the onshore Khazzan gas project, which will start output in 2021. In 2018, PDO announced the discovery of a tight gas field on its own concession
Leading Sub-Sectors
Drills and drilling services, hydraulic fracturing technology and services, oil-extracting equipment, sand removal devices for crude oil, boilers, drilling rods, separators, burners in mobile tanks, pipeline heating for heavy crude, water treatment systems, quality inspection, steam injection and other enhanced oil recovery technologies. Gas plants, pipelines, flow lines, well pads, wells, compressors, rigs and frack spreads, operations support and infrastructure.
Opportunities
The oil and gas sector continues to provide some of the best prospects for U.S. goods and services. A significant portion of the country’s oil infrastructure is aging, which provides a market for pipelines, wellheads, pumps, and related equipment. Additionally, Oman has a number of older fields and fields with complex geology, and the first serious offshore exploration began in 2017. As a result, Oman needs advanced technology such as 3-D seismic analysis to facilitate exploration efforts. Finally, there is interest in computer systems that can monitor remote wells and cut labor costs. Investment is expected to shift towards maximizing output from cost-effective reservoirs using innovative technologies to cut costs and eliminate waste. There has been increasing interest in liquid bulk storage and hydrocarbon logistics projects in Oman. All of these are attractive opportunities for U.S. firms. As the Sultanate pursues economic diversification and explores alternatives to hydrocarbons for power generation, renewable energy investment is becoming increasingly relevant.
Web Resources
Ministry of Oil and Gas
Ministry of Commerce and Industry
Petroleum Development Oman
Oman Oil Refineries and Petroleum Industries Company (ORPIC)
Business Gateways- Joint Supplier Registration System
OGWA: Oil and Gas West Asia - Exhibition and Conference