Expansion hikes Oman’s refining capacity by 36%, potentially cutting crude exports by up to 80,000 b/d. Duqm refinery targets products exports from 2023.
Despite a ninth straight budget deficit, 2017 was a decent year for Oman energy. Exports held steady, revenues ticked up, and products output broke records.
This year should see Oman’s Khazzan gas field hit full 1bn cfd phase-1 output. But maintaining oil output at around 1mn b/d, never mind increasing it, will be tricky – albeit essential given the country’s cash-strapped finances. Oman hopes freshly-expanded offshore claims will ultimately help replenish its reserves.
Last year saw record low global oil and gas discoveries. The 2018 picture looks similar, despite a nascent major return to deepwater drilling. The Middle East, a bright spot in the downturn, kept drilling at near-record levels in 2017, but dwindling cash reserves mean activity has eased.
Oman’s freshly-released 2018 budget projects a 17% fall in the deficit based on optimistic spending cuts of 5%, though the $50/B oil price assumption is conservative. But, even under the most optimistic scenario, deficits will continue for a 10th straight year, a cumulative $48bn.
Higher oil prices and a boost to gas output will see Oman finish 2017 strongly despite a ratings downgrade. As BP plots further gas expansion and heavyweights Eni and Oxy grab the latest exploration blocks, there is cause for quiet optimism.
Low cost Mideast fields are of growing importance for BP. The expiry of Abu Dhabi’s Adma sees output dip, but growth in Oman & Kuwait means long-term the trend is up.
Omani crude and condensate exports are set to rise in October as the Sultanate’s 106,000 b/d Mina al-Fahal refinery undergoes...
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