BP brings shale techniques to Oman to start gas production

26 Sep 2017   Oman

British energy company BP said it brought lessons learned from hydraulic fracturing in the United States to start production at a natural gas field in Oman. BP and the Omani Ministry of Oil and Gas announced the start of production from the Khazzan natural gas field, BP’s sixth and largest start-up for the year. “Khazzan further demonstrates BP’s ability to consistently deliver large, complex projects on schedule and within budget while applying the industry-leading skills and technology we’ve developed globally,” BP CEO Bob Dudley said in a statement . “In this case, tight gas techniques we perfected in the United States have been brought to Oman and we are very pleased with the results.” Hydraulic fracturing has […]

Is This The Newest Nuclear Player In The Middle East?

8 Sep 2017   Nuclear, Oman

But some global buyers see an opportunity in the current market crisis. With one of the world’s largest investors this week making a leap into the sector. That’s the sovereign wealth fund of Oman. Which agreed to invest up to $120 million to fund a uranium development project in Spain — and potentially take a significant chunk of the uranium supply from the operation. The Oman fund said it will make the investment as a combination of debt and equity in project developer Berkeley Energy. Which is advancing the Salamanca project, currently under construction and expected to begin output in 2019. The move is a big one for the Oman government. Representing the first entry by this major investment group into the uranium sector. And the timing isn’t a coincidence. With Oman’s first nuclear plant slated to come online next year — supplying baseload power to the nation. That […]

Oman Supports Organized Oil Production Cuts Beyond March 2018

11 Jul 2017   Oman

Oman would support OPEC output cuts past March 2018 to support oil prices, according a new report from The Times of Oman . There was no mention of deeper cuts. The country Is currently cutting 45,000 barrels per day of production as part of a November deal between the bloc and a handful of non-bloc producers to reduce output by 1.8 million bpd. “Being satisfied with the results of production cuts will be an overstatement,” said Salim al Aufi, the petroleum ministry’s undersecretary. “We would certainly want to see the prices of oil to go higher. We will support any action that will ensure sustainability or improvement of the current oil prices. If extension will secure sustainability or growth in prices, we will support it.” Oman’s energy sector activities have been minimally affected by the three-year market downturn, the senior official said. “We haven’t reduced jobs or activities in […]

Oman Cut to Junk by S&P as Crude Oil Decline Imperils Finances

13 May 2017   Oman

Credit rating lowered to one notch below investment grade S&P says Oman can’t mitigate risk of volatile export revenue Oman was cut to junk by S&P Global Ratings, which said a drop in crude could hamper exports from the largest Arab oil producer outside OPEC and jeopardize its finances. S&P lowered the Gulf state’s sovereign debt long-term rating to BB+, one level below investment grade, from BBB- and changed the outlook to negative, the New York-based firm said in a statement Friday. “The negative outlook reflects the potential for Oman’s income level to weaken and for its fiscal and external positions to deteriorate,” S&P said in a statement . The slump in oil prices since 2014 has put pressure on the finances of the sultanate, forcing it to join other Gulf countries in tapping international debt markets to plug budget shortfalls. Oman, which has the third-lowest investment grade rating […]

Gulf’s $24 Billion Bond Bonanza Meets Cash Need in Cheap Oil Era

Middle East international bond sales are off to the strongest ever start to a year as borrower demand for funds outstrips the firepower of local banks in an era of depressed oil prices. Hard-currency bond issuance from the six-nation Gulf Cooperation Council, which accounts for the bulk of the region’s capital markets and includes Saudi Arabia, its largest economy, more than quadrupled in the first quarter from a year earlier, according to Bloomberg data. In contrast, syndicated lending, traditionally the preferred source of capital for GCC borrowers, is having its worst year since 2010, declining 73 percent in the first three months of the year. “It is mainly the sovereigns that have issued this year and they are very conscious about not sapping liquidity in the local banking system so that access to credit to the small and medium sized companies is not hindered,” said Anita Yadav, head of […]

This Non-OPEC Member Just Called For An Extension Of The OPEC Deal

4 Apr 2017   Oman, OPEC

Non-OPEC Oman will continue to cap its crude oil output at 970,000 bpd this year if OPEC and non-OPEC countries were to extend the production cuts through the end of 2017, according to a senior Omani government official. “We support any initiative that will lift oil prices. If that means extending the current agreement beyond the first six months, we will not block it,” Salim bin Nasser Al Aufi, undersecretary at the Ministry of Oil and Gas, said at a media briefing on Monday, as quoted by Times of Oman. Still, the official was quick to add: “However, we need to know the details – how long it is going to continue.” Oman is part of the group of 11 non-OPEC producers—including Russia—that had agreed to act jointly with the cartel to cut oil supply, and that pledged a total production cut of 558,000 bpd. In January, Oman said […]

Are Gulf Oil Producers Falling Into The ‘Venezuela Trap’?

1 Apr 2017   Abu Dhabi, Oman

Oman has struck a deal with several banks for a $4 billion loan to be repaid in future oil deliveries. Abu Dhabi signed a contract with commodity trading giant Vitol to supply it with over half a million tons of liquefied petroleum gas annually over the next decade in exchange for an upfront payment. According to the Wall Street Journal , other Middle Eastern producers are also considering oil-for-loan schemes, desperate for cash as oil prices stubbornly refuse to go up to the levels they need. Will these producers fall into the trap that has already claimed Venezuela? The South American country that is home to the largest oil reserves in the world owes China and Russia around $50 billion . The loans were provided in exchange for crude oil deliveries that Venezuela is now struggling to make. The problem with loan-for-oil schemes is that it can cost the […]

Oman Plans to Sell as Much as $2 Billion of Bonds Amid Deficit

8 Dec 2016   Oman

Oman, the largest Arab oil producer that’s not an OPEC member, plans to sell between $1.5 billion to $2 billion of bonds internationally in 2017 to plug a deficit caused by low crude prices. “There’s an appetite still and I think even when interest rates are raised there will still be appetite,” Ali Hamdan Al-Raisi, vice president for banking oversight at Oman’s Central Bank, said in an interview at an event in Abu Dhabi on Wednesday. The size and exact timing hasn’t yet been finalized, he said. The sultanate sold $2.5 billion worth of bonds in June in its first such sale since 1997 and tapped the bonds for an additional $1.5 billion in September. The country also raised $1 billion from the international loan market in January to help bolster its finances. Oman joins several other governments and companies from the six-nation Gulf Corporation Council tapping the bond […]

Iran eyes natural gas exports to Oman with international oil companies

15 Nov 2016   Iran, Oman

Senior officials from state-owned National Iranian Gas Exports Co have met with Oman’s oil ministry and three international oil companies — Shell, Total and Korea Gas Corp — to look at the potential to pipe gas from Iran to Oman, the students ISNA news agency reported Monday. The officials held a two-day meeting in Tehran examining cooperation in the project, the reports said without giving further details. In 2013, Tehran and Muscat agreed on a 15-year gas exports plan via a seabed pipeline. The pipeline, estimated to cost around $1.5 billion, will have the capacity to transport 1 Bcf/d of Iranian natural gas to Oman. “We can confirm that Shell is a member in the Advisory Task Force of the Iran/Oman gas pipeline Project. The scope of the work of the project is subject to confidentiality”, a spokesman for Shell said Monday. Article Continues below… Contact Sales More Information […]

BP to use hydraulic fracturing for Oman’s gas

9 Nov 2016   Oman

British energy company BP said it extended an agreement in Oman to help develop a natural gas field that may require hydraulic fracturing to exploit fully. BP and Oman Oil Co. signed a deal with the government to revise a license area for so-called Block 61 to further develop the Khazzan natural gas field. The British energy company said the field holds a “significant” amount of natural gas that will “need to be hydraulically stimulated to flow gas at target rates.” Hydraulic fracturing led in part to the substantial increase in U.S. oil and natural gas production, though the success rate has not been replicated elsewhere in the world to the same extent. Khazzan entails exploitation of what BP […]

Oman Willing To Cut Up To 10% If OPEC Leads The Way

8 Nov 2016   Oman

Small non-OPEC producer Oman believes that an OPEC production deal is now more in sight than it was a few months ago, Omani Minister of Oil and Gas Mohammad bin Hamad al-Rumhy told the Abu Dhabi International Petroleum Exhibition and Conference (Adipec). Oman is ready to cut if OPEC reaches a deal, the minister added. “First of all, we call for cutting down of oil production and reaching an agreement between oil producers on the issue; in this case Oman is ready to cut down oil production by 5-10 percent. The second option for us is a freeze,” Rumhy told reporters on the sidelines of the conference, as quoted by news agencies. Al-Rumhy noted that the oil market was still oversupplied. “Maybe we have seen the bottom, but we don’t know how long this bottom will last,” Reuters quoted the minister as saying. A month before the […]

Oman says to change Iran gas pipeline route to avoid UAE

11 Aug 2016   Oman

Oman’s Oil Minister Mohammad bin Hamad bin Saif al-Rumhi attends during the opening session of the first Gas Exporting Countries Forum (GECF) summit in Doha November 15, 2011. Oman and Iran have agreed to change the route and design of a planned undersea natural gas pipeline to avoid waters controlled by the United Arab Emirates, Oman’s Minister of Oil and Gas Mohammed bin Hamad al-Rumhy said on Wednesday. The planned pipeline would connect Iran’s vast gas reserves to Omani consumers as well as liquefied natural gas (LNG) plants in Oman that would re-export the gas. After international sanctions on Tehran were lifted in January, the two countries renewed efforts to implement the project, but it has also been delayed by disagreements over price and U.S. pressure on Muscat to find other suppliers. In an interview, Rumhy said Oman and Iran were at an advanced stage of designing the pipeline […]

Saudi Arabia and Bahrain See Low Oil Price Prompt Ratings Cut

14 May 2016   Oman, Saudi Arabia

Middle Eastern oil producers including Saudi Arabia and Oman had their ratings downgraded by Moody’s Investors Service because of a collapse in oil prices, according to a statement from the credit-ratings agency on Saturday. The long-term issuer rating on Saudi Arabia, the world’s biggest oil exporter, was downgraded to A1 from Aa3 as lower oil prices may lead to a “material deterioration” in the nation’s credit profile. Bahrain’s rating was reduced to Ba2 from Ba1 and Oman was cut to Baa1 from A3, while the outlook for crude exporters including Abu Dhabi, Qatar and Kuwait were negative. Brent crude, the global benchmark, is almost 40 percent lower than in November 2014, when Saudi Arabia led a decision by the Organization of Petroleum Exporting Countries to keep pumping to defend market share in the face of swelling global inventories. While demand from emerging nations such as India was spotted in […]

Oman Offers to Bridge Saudi-Iran Gap in Oil Output Talks

18 Apr 2016   Oman, Saudi Arabia

Oman, the biggest non-OPEC oil exporter in the Persian Gulf, offered to narrow differences between Saudi Arabia and Iran that scuttled a planned crude output freeze. Futures fell as much as 6.8 percent in New York, the biggest intraday drop since Feb. 1, after 16 countries failed at a meeting in Doha to limit their production in an effort to reduce a global glut. The outcome of the Sunday summit was disappointing but not a surprise because Iran wasn’t involved in the talks and Saudi Arabia insisted on Iran’s inclusion in the freeze, Oman’s Oil and Gas Minister Mohammed Al Rumhy told Bloomberg TV. Producers should still work on reaching a deal, Rumhy said, offering to facilitate discussions. “Oman has a good relationship, by the way, with everyone, not just Saudis and Iran, and we are prepared to see what is good for all of us,” he said. One […]

New Guard Rises in Saudi Arabia as Oil Crisis Forces Rethink

16 Mar 2016   Oman

After a year of plunging oil prices, all eyes were on Ibrahim Al-Assaf, Saudi Arabia’s finance minister for two decades, to deliver a budget that could restore confidence in the kingdom’s finances. Yet it was Adel Fakeih, economy minister for just eight months, who strode onto a shiny green television set to announce spending cuts and subsidy reductions . Another familiar face missing that day was oil minister Ali Al-Naimi, whose words continue to move global crude markets as they have since 1995. Changes to domestic energy prices were explained by Khalid Al-Falih, chairman of Saudi Arabian Oil Co. and health minister. Photographer: Fayez Nureldine/AFP via Getty Images The lineup at the end of December was one of the first signs of a shift in power to officials seen closely aligned with King Salman’s influential son, Deputy Crown Prince Mohammed bin Salman, as Saudi rulers confront a harsh new […]

Arab States Face $94 Billion Debt Crunch on Oil Slump, HSBC Says

Gulf Cooperation Council countries may struggle to refinance $94 billion of debt in the next two years as the region faces slowing growth, rising rates and rating downgrades, according to HSBC Holdings Plc. Oil-rich GCC states have to refinance $52 billion of bonds and $42 billion of syndicated loans, mostly in the United Arab Emirates and Qatar, HSBC said in an e-mailed report. The countries also face a fiscal and current account deficit of $395 billion over the period, it said. Expectations that these funding gaps “will be part financed through the sale of sovereign U.S. dollar debt will complicate efforts to refinance existing paper that matures over 2016 and 2017,” Simon Williams, HSBC’s chief economist for the Middle East, said in the report. “With the Gulf acting as a single credit market, the refinancing challenge will likely be much more broadly felt” and “compounded by tightening regional liquidity, […]

Oman Credit Rating Cut at Moody’s on Negative Oil Price Impact

27 Feb 2016   Oman

Oman, the poorest Gulf Arab country on the basis of economic output per person, was cut for the first time by Moody’s Investors Service, which cited the negative impact of lower oil prices on government finances, economic performance and balance-of-payments. Oman’s credit rating was reduced by two levels to A3 and placed on review for a further downgrade. It’s Moody’s first downgrade of the nation since issuing its initial rating in 1999. That puts it on par with Mexico and Malaysia. Moody’s said its review of Oman for another cut reflects “uncertainty over the pace and effectiveness of the government’s policy response to challenges.” The decision is the latest in a series of ratings cuts that has hit Gulf Cooperation Council members, which collectively produce about a quarter of the world’s oil, as crude prices struggle to rebound from the lowest levels in 12 years. The country was downgraded […]

Saudi Rating Gets S&P Jolt as Four Oil-Nation Credits Cut

The negative impact from the plunge in oil prices rippled further throughout crude-producing nations as Standard & Poor’s cut the credit ratings of Saudi Arabia, Oman, Bahrain and Kazakhstan. Saudi Arabia’s credit grade was cut two levels to A- from A+ as oil prices continued to tumble. Oman’s was lowered to BBB- from BBB+, following a reduction in November. Kazakhstan is now rated BBB-, down from BBB. Bahrain was cut to BB from BBB-, putting it two steps below investment grade and the only one of the four to be rated junk. The Saudi downgrade comes less than four months after S&P cut the kingdom’s credit rating one level to A+ in late October, when Brent crude was selling for around $50 a barrel. It traded at a high of $34.76 in London on Wednesday. The decline in oil prices “will have a marked and lasting impact” on the […]

BP Expands Scope of $16 Billion Natural Gas Project in Oman

15 Feb 2016   Oman

BP Plc and state-owned Oman Oil Co. agreed to expand an exploration and production sharing agreement of the Khazzan natural gas field to include a second development phase, at an estimated cost of $16 billion for the entire project. Block 61 will add 1,000 square kilometers (386.1 square miles) to the original 2,700 square kilometer area of development, BP said Sunday in an e-mailed statement. The project will produce 1.5 billion cubic feet of gas per day, or 40 percent of Oman’s current output. The new development requires final approval of Oman’s government and BP, which is expected in 2017, the company said. The reservoir is known to have “tight gas,” which is trapped in impermeable rocks and requires techniques including hydraulic fracturing to extract. Oman, an exporter of liquefied natural gas to Spain, Japan and South Korea, is studying options to import LNG to help generate power. Domestic […]

Venezuela talks oil prices with Qatar, Oman; to meets Saudis

Venezuelan Oil Minister Eulogio Del Pino, on a tour of oil producers to lobby for action to prop up prices, said on Thursday he had a “good and productive” meeting with his Qatari counterpart. The Qatari ministry also said the two ministers “exchanged views and expectations in the short and long term”, but gave no further details. Qatar’s Energy Minister Mohammed al-Sada is the current holder of the rotating OPEC presidency. Del Pino later met Oman’s Oil Minister Mohammad bin Hamad al-Rumhy, who “reiterated his support of the actions Venezuela has taken to stabilize the market,” according to statements from the Oil Minister and state oil company PDVSA [PDVSA.UL], over which Del Pino presides. […]

Bahrain, Oman Cut Gas Subsidies

13 Jan 2016   Bahrain, Oman

Bahrain and Oman on Tuesday reduced government subsidies on gasoline, becoming the latest Gulf Arab countries to try to cut back on spending and offset the effect of oil prices, which have fallen to their lowest level since 2003.  On Tuesday, gas prices at the pump rose by up to 60 percent in Bahrain, climbing to $1.25 per gallon for regular gasoline and $1.60 per gallon for premium fuel. Hundreds of people lined up at gas stations a day earlier to fill their cars before the higher prices went into effect.  The tiny island-nation in the Gulf ended subsidies on meat and poultry in October, increasing consumer prices between three and four-fold. Bahrain plans to make further cuts in electricity and water subsidies in March.  Earlier this month, Bahrain cut government subsidies for diesel and kerosene.  Meanwhile, Oman said it would reduce gasoline subsidies starting Friday, with prices set to rise by 33 percent for premium fuel and 23 percent for regular fuel.  The moves come as crude prices closed Monday at $31.41 a barrel on the New York Mercantile Exchange — the lowest in 12 years.  The dip in global oil prices has cut into the revenues of oil-exporting countries, including many Gulf Arab states where citizens have become accustomed to generous government subsidies and state handouts.

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Oman Advisory Body Approves Corporate Tax Rise as Oil Rout Bites

23 Dec 2015   Oman

Oman’s Shura Council voted to hike corporate taxes as the Middle East’s largest oil producer outside of OPEC faces another year of shrinking government revenue. The elected advisory body voted on Tuesday to raise corporate taxes on companies registered in Oman by 3 percentage points to 15 percent and to end corporate tax exemptions, council member Tawfiq Al Lawati said by phone. The council also voted to raise taxes on net income to 35 percent for petrochemical companies and 55 percent for natural gas companies, the official Oman Daily reported. The recommendations need approval from the State Council and cabinet before becoming law. The oil-rich Sultanate faces a budget deficit of more than 17 percent of economic output this year as the oil price slump cuts into the government’s main source of revenue, pushing officials to study project delays and new taxes. While Oman isn’t the only Gulf country […]

Gloom descends on Gulf as oil price slump hits economy

A caustic slogan is doing the rounds on social networks in the Gulf states this festive season: “All I want for Christmas is for oil prices to go up.”  Gloom has descended on the region amid an oil price rout that has halved the price of crude over 18 months and wiped $360bn off export earnings just this past year.  State contractors, the property sector and even foreign investors have all felt the pain as the slump pushes governments to cut back spending.  “2015 has been a difficult year, but this is just the beginning of a multiyear adjustment process: 2016 will be just as tough, and then there is 2017 and 2018,” says Masood Ahmed, the International Monetary Fund director for the Gulf region. “Next year the slowdown is not going to ease up.”  Swingeing spending cuts have unnerved private businesses in Saudi Arabia, the region’s largest economy, and elsewhere — as well as undermining the policy of government largesse long used to defuse social tensions.

Exports of Oman crude in June outpaces production on surge in China demand

20 Jul 2015   Oman

Oman exported more crude oil in June than it produced after trading giant ChinaOil picked up an unprecedented 49 cargoes during the Platts Dubai Market on Close assessment process in April. China, which has been the biggest buyer of Oman crude in recent years, accounted for 90% of the country’s overall crude exports in June, up more than 12% from May, according to data released by Oman’s oil and gas ministry over the weekend. Oman exported 912,015 b/d of crude oil in June — up 11.28% from May — even as its production was only 888,636 b/d, according to government data. In addition to exports, it also supplied 134,366 b/d of crude to domestic refineries, up from 92,534 b/d in May. While China’s share of Oman crude reached a record high, it wasn’t immediately clear where the additional export barrels came from. Traders said the extra crude could be […]

Oman to Build Giant Solar Plant to Extract Oil

8 Jul 2015   Oman

The Persian Gulf sultanate’s repertoire now includes a technology not generally associated with oil pumping: solar power. One of the world’s largest solar plants will be constructed to coax Oman’s heavy oil out of the ground, according to Oman and its partners, Royal Dutch Shell RDS.A -0.29 % PLC and French energy company Total SA TOT 0.59 % . Called Miraah, which means “mirror” in Arabic, the 1,021 megawatt solar-thermal facility is slated to be completed in 2017 and located at the Amal West oil field in South Oman. The solar plant will be built by Petroleum Development Oman, a joint venture between the Omani government, Shell and Total, and GlassPoint Solar, a Fremont, Calif.-based solar manufacturer. The construction of a […]

Oasis at Risk: Oman’s Ancient Water Channels Are Drying Up

3 Jun 2015   Oman, Water

Since pre-Islamic times, Oman’s water systems known as aflaj have brought water from the mountains and made the desert bloom. But now, unregulated pumping of groundwater is depleting aquifers and causing the long-reliable channels to run dry. It was 47 degrees Celsius. Make that 117 degrees Fahrenheit. In mid-May, the desert of northern Oman may have been the hottest place on the planet. But in the shade of the oasis, the temperature was dramatically cooler. Ali Al Muharbi, in his white robes and beard, beamed as he showed me around the date palms. All were irrigated by water gurgling down a channel dug many centuries ago to tap underground water in the nearby Hajar mountains. In Oman, a country on the shores of the Arabian Sea, these magical waters conjured from the most arid land imaginable are called “unfailing springs.” Image by Fred Pearce: Ali Al Muharbi (right) says […]

Age of Plenty Seen Over for Gulf Arabs as Oil Tumbles

The boom that adorned Gulf Arab monarchies with glittering towers, swelled their sovereign funds and kept unrest largely at bay may be over after oil prices dropped by almost 50 percent in the last six months. The sheikhdoms have used the oil wealth to remake their region. Landmarks include man-made islands on reclaimed land, as well as financial centers, airports and ports that turned the Arabian desert into a banking and travel hub. The money was also deployed to ward off social unrest that spread through the Middle East during the Arab Spring. “The region has had 10 years of abundance,” said Simon Williams , HSBC Holdings Plc’s chief economist for central and eastern Europe , the Middle East and North Africa. “But that decade of plenty is done. The drop in oil prices will hurt performance in the near term, even if the Gulf’s buffers are powerful enough […]

Oman’s $3 Billion Railroad Plan to Blunt Iran Oil Risk: Freight

6 Feb 2014   Oman

Oman , which faces Iran across the Strait of Hormuz , said it’s poised to start raising cash for a $3 billion rail line offering an alternative route for oil and freight shipments that funnel through the 21 mile-wide channel. The nation of 3.3 million people, located on the southern side of the strait, is considering issuing bonds by the end of 2014 to kick-start funding for the track across some of the Arabian peninsula’s harshest terrain, Abdulrahman Al Hatmi, a director at Oman National Railway Co., said in an interview. Iranian threats to close the Hormuz waterway have been a recurrent theme in Western relations with the Islamic republic since the 1979 revolution. While tensions have begun to ease after an interim deal aimed at halting Iran’s nuclear program , Al Hatmi said the “very expensive” rail line is more than justified by the new trade opportunities bypassing […]