Summary

The Oman oil and gas market is expected to grow at a CAGR of more than 5% during the forecast period. Factors such as supportive government policies, efforts to grow the downstream sector coupled with upcoming projects, are expected to drive the market studied. However, the high capital investment required, coupled with a lack of financing due to a global economic slowdown in the event of the COVID-19 outbreak, is expected to hinder the growth of the market in the coming years.

Key Highlights
The Upstream segment held the major market share in 2019, and it is likely to dominate the market during the forecast period.
High number of discoveries in recent years and the continued exploration activities are expected to provide a significant opportunity for the market players in the country’s oil and gas industry.
Increased exploration activities in the country is expected to be the major driver for Oman Oil and Gas Market.


Key Market Trends

Upstream Sector to Dominate the Market


Upstream sector has dominated the Oman oil and gas market in recent years and is expected to continue to do so during the forecast period too.
In 2018, Oman's oil production reached 978 thousand barrels per day, representing a slight increase of 0.8% over the previous year. On the other hand, the country's natural gas production reached 3.5 billion cubic feet per day (bcf/d), representing an increase of 11.4% from the previous year.
In the first half of 2019, the country's oil production stood at 1 million barrels per day. Similarly, natural gas production reached 3.8 bcf/d during the same period. The increase in oil and natural gas production can be attributed to an increase in the country's oil and gas expenditure, totaling about USD 11.8 billion in 2018, which is slightly higher than in 2017.
Gas has played an increasingly important role in Oman's energy sector since the early 2000s, and this trend is expected to continue during the forecast period. Plans for Mabrouk North East follow the successful development of the Khazzan gas field by BP, which came on stream in 2017. The second phase of the project, known as Ghazeer, is currently underway and is expected to increase gas production from the Khazzan field, from the current level of around 1 bcf/d to 1.5 bcf/d.
Owing to several major gas discoveries in recent years, the Upstream sector is expected to dominate the market during the forecast period.


Increased Exploration Activities to Drive the Market


The Government of Oman has adopted a strategic policy to increase exploration activities in the country. In December 2018, Oman's Ministry of Oil and Gas signed two oil and gas exploration contracts with Occidental Oman, worth USD 58 million, paving the way for more than 10 offshore drilling wells to be set up in the country.
The deals grant exploration rights for two concessions, one of which is Block 65 that covers 1,230 km² and may hold oil. The second one, Block 51, spans 10,133 km² and may have gas reserves. Occidental Oman is planning to invest USD 32 million in Block 65, while Oman Oil Company Exploration and Production is expected to invest USD 12 million into the concession block. Nine drilling wells are expected to be set up in two phases over a six-year period. Meanwhile, USD 14 million is expected to be invested by Occidental Oman in Block 51 in two phases, over a six-year period, during which it plans to drill five exploration wells to look for gas assets.
In April 2019, Total SA and Oman's's Ministry of Oil and Gas signed heads of agreements to award the French company an exploration license, covering Block 12 in Central Oman. The Block 12 program may include seismic data acquisition and drilling commitments, with the first well due in 2020.
In July 2019, Oman's Ministry of Oil and Gas signed a gas exploration agreement with Eni SpA and BP Oman for concession block 77. The agreement involves seismic studies and the drilling of exploration wells, and it is expected to lead to the discovery of new oil fields. The agreement offers exploration rights and development of an onshore area of 2.73 sq. Km. in central Oman. During the exploration period, Eni may be the operator with a 50% stake, while BP is expected to hold the rest.
All of the above factors combined are expected to help drive the Oman oil and gas market during the forecast period.


Competitive Landscape

The Oman oil and gas market is moderately consolidated. Some of the key players are BP Plc, Royal Dutch Shell, Eni SpA, Oman Oil Marketing Company SAOC, China National Petroleum Corporation​, among others.

Additional Benefits:

The market estimate (ME) sheet in Excel format
3 months of analyst support

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