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15 Oct 2021
Challenged by years of drift even before Covid-19 had a heavy impact on its economy, Oman has sought to revitalise its hydrocarbons industries since Sultan Haitham Bin Tariq Al-Said came to power. Institutions have been reconfigured and some big players continue to invest in gas, but overall the results are mixed.
There have been some successes, such as the BP-operated Khazzan tight gas project, while TotalEnergies’ multi-billion dollar plans for the Greater Barik area point to future developments. But even before energy transition trends dampened IOC interest in exploration and production (E&P) plays, Oman’s allure was wearing thin as a rare hydrocarbons frontier in the region where explorers can participate in open auctions and minnows can buy into acreage.
These trends are reflected in the mix of companies still operating in Oman, catalogued block by block in GSN’s new E&P update, which records the retreat of independents and minnows, which has left open blocks or investment opportunities for often little-known local companies, shown in the Oman hydrocarbons map. The Ministry of Energy and Minerals’ first upstream licensing round since the pandemic, offering three open blocks, is intended to reignite interest in less-explored corners.
Business-minded Sultan Haitham Bin Tariq Al-Said’s determination to revitalise the sector has led to institutional reforms, with the creation of Energy Development Oman – whose interim chief executive Haifa Al-Khaifi is raising money to fund new developments – and the Oman Oil Company and Orpic groups’ difficult merger to create OQ.
OQ has also raised funds abroad, with a $2bn global medium term note programme under way, as it works to become a “large-scale national champion”. OQ’s founding chief executive Musab Abdullah Al-Mahrouqi resigned in January as the scale of Covid-era losses became clear. New group CEO Talal Al-Aufi is getting rid of non-core and under-performing subsidiaries as OQ looks to implement major developments and to find partners.
Oman E&P Special Report
The report was originally published as part of GSN Issue 1,135 and is available to full newsletter subscribers by downloading the issue.
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