Fund infusion in oil, gas sectors to rise on demand
Haider Al lawati –
Despite the decline in oil revenues of nations producing this commodity in the last three years, the importance of this commodity will remain significant in the coming decades until a new source of energy can be relied on to meet the demands of all manufacturing institutions and companies worldwide.
Global reports indicate oil-producing nations will inject more funds in the oil and gas sectors as a result of demand for oil and its derivatives. Governments and local companies are injecting more funds for new explorations and employment of more workers in oil companies.
At a recently held annual conference of the Ministry of Oil and Gas, Eng Salem bin Nasser al Auwfi, Under-Secretary in the ministry, said the government will continue to increase the volume of investments in the oil and gas sector through several exploration and drilling schemes in many concession areas.
“The ministry, in cooperation with oil-producing companies, led by PDO, was able to achieve positive results last year in the field of exploration, especially in different concession areas, which helps employ more citizens in various fields of interest in the sector,” he said.
At the domestic level, the number of employees in the oil and gas companies operating in Oman increased during the past year to 17,100, of which 13,554 are nationals and 3,546 expatriates, a 3.2 per cent increase compared with 2015. This is not to mention the employees in the subcontracting companies and the services they provide to this sector.
These companies seek to adopt employment and training programmes, requalification and provide scholarships for Omani employees, in addition to assigning contracts to local companies to implement vital projects.
There are many Omanis working in major local companies that provide services for oil companies that are seeking to improve their services in various tasks related to their daily work and provide more jobs to Omanis.
This, in turn, increases the added value of these companies through the construction of platforms, drilling of wells, paving of roads, construction of housing complexes, besides installation of pipelines, supply of services and manufactured products in the domestic market and support to small and medium enterprises and other businesses.
According to the ministry’s report, companies operating oil concession areas have dug, tested and evaluated 29 exploratory and evaluation gas wells in the Sultanate in 2016. Results of analyses and the well production tests have yielded some positive indicators, which added new gas reserves, indicating that gas reserves in Oman are expected to reach 24.79 trillion cubic feet by the end of 2016. The expenditure volume in the oil and gas sector in the current year is expected to reach $16 billion, highlighting the major investment opportunities in the sector during the next stage, while local and international companies are competing to win a share in these projects in the concession areas.
Alongside these projects, Oman ventured into establishing projects for clean energy from solar energy to boost oil production. By the end of 2016, the total reserves of the Sultanate’s oil and condensate reached 5,115 million barrels, while total gas reserves stood at 21.15 trillion cubic feet.
With this in mind, the government is exerting efforts to encourage the local and foreign private sector to jointly invest in the oil and gas sectors and work in the fields of exploration, production and development, establishment of gas-based projects and support projects for the oil industry. The total expenditure in the oil and gas exploration, production and development sector in the Sultanate amounted to $11.3 billion last year compared with $11.43 billion in 2015, of which $7.9 billion is for the oil sector and $4.2 billion for the gas sector.
This shows the government’s commitment to this sector as the volume of investment and expenditure in the oil sector was not affected by the decline in global prices.
In addition, Oman has succeeded in reducing the cost of oil production while its production exceeded one million barrels a day. In commitment to the Geneva Agreement, the Sultanate decreased its share to about 45,000 barrels a day. The Sultanate also has plans, in case of extension of the agreement, to expand and exceed the quantity currently produced, where much of these will be allocated to value-added industries and refineries.