Oman is shifting its focus towards natural gas

Oman mastered all the countless challenges of 2020 with considerable flair, even if the year began with the untimely demise of Sultan Qaboos, then came the coronavirus pandemic and the renewed OPEC + production cuts, which had the double effect of lower prices and lower for the economy Have brought production.

The nation of the Middle East is now trying to deal with the second wave of COVID by adapting to a new way of life under curfew and increasing tax pressure. While much of this year hasn't brought big advances in Oman's oil, its gas segment could take the baton, as the case of the giant Ghazeer field shows. So far, Oman has consistently adhered to its OPEC + obligations and adhered to the agreed production quota of 682 kbpd. Under normal circumstances, Oman's output would have been 930-950 kbpd, but difficult times require difficult decisions. As a result, the funding rate fell from 947 kbpd in April 2020 to 679 kbpd in May 2020 and has remained more or less at this level since then.

The production cut mainly affected Block 06, which is operated by Petroleum Development Oman and is partly in state hands. Of the additional 201 kbpd production cut that Oman has committed to, Block 06 will account for 135 kbpd, and Occidental Petroleum has agreed to cut production in its blocks 53, 27 and 09 by 58 kbpd. While this is evidence of Oman's flexibility to face falling demand (even though Oman is not an OPEC member), the country's 2020 budget assumed that monthly production would fluctuate around 965 kbpd.

At the national level, Oman has taken decisive action to make its political presence leaner and more adaptable. Mohammed bin Hamad al-Rumhy, who has headed the Sultan's Ministry of Energy for 23 years, has seen his influence grow as his office expanded to include a new Ministry of Energy and Minerals. The IPO of OQ (the successor to Oman Oil, named after the late monarch), expected for 2020, in which the national Omani oil company would have become the second NOC in the Gulf to list its shares (although not all, according to preliminary plans 20-25% ), has been removed from the actual agenda as the likelihood seems very small that Muscat can adequately perform it in the current circumstances.