Oman boosts oil output by 68,000 bpd in four months

Oman boosted its crude production by nearly 68,000 barrels per day in the first four months of 2010 as the Gulf nation is pushing ahead with a drive to reverse a decline in its oilfields, according to official figures.

From about 786,100 bpd in the first four months of 2009, the country's oil output surged to nearly 854,800 bpd in the first four months of 2010, an increase of about 8.6 per cent, showed the figures by the Omani Ministry of Economy.

The increase extends a steady rise over the past three years following a steep decline in the country's crude output in previous years because of a surge in investment in the gas industry at the expense of oil fields.

In 2007, Oman approved a $10 billion (Dh36.72bn) programme to develop its crude oil and natural gas resources, which are officially estimated at about five billion barrels and 30 million cubic metres respectively. The plan is intended to develop gas deposits and push up oil production to previous levels after a steady decline for nearly four years.

Production began recovering in 2008, when it grew by nearly 6.5 per cent to 756,000 bpd from 710,000 bpd in 2007. In 2009, Oman achieved its budget target of pumping nearly 810,000 bpd.

Oman is the only Gulf country that has not cut its oil output as it is not a member of the 12-nation Organization of Petroleum Exporting Countries (Opec). Neighbouring the UAE, Saudi Arabia and Kuwait have slashed crude supply by at least 1.5 million bpd in line with an Opec accord to keep prices firm.

The Ministry's figures showed Oman pumped about RO655.7 million (Dh6.2bn) in its oil sector in 2009 and nearly RO195m in the first four months of 2010. Gas investments were put at about RO295.9m and RO74.3m in the same period.

The surge in oil production allied with a sharp rise in crude prices to boost Oman's oil export earnings by nearly 99 per cent to RO1.988bn in the first four months of 2010 from about RO999m in the first four months of 2009, according to the Ministry of Economy.

Gas revenues also swelled by nearly 11.7 per cent to RO304.1m from RO272.3m.

Buoyed by stronger oil prices, Oman early this year joined other Gulf nations in announcing a record high budget with an ongoing fiscal stimulus to cushion the effects of the 2008 global fiscal turbulence.

The 2010 budget was based on a more optimistic oil price of $50 a barrel compared with $45 in 2009, according to Omani Minister of National Economy, Ahmed Mecki, who put spending at RO7,180m, nearly nine per cent above the 2009 record budget.

Revenues, generated mostly from oil and gas sales, were assumed at RO6,380m, leaving a deficit of RO800m.

Official data showed the revenues include about RO4,050m in oil exports, accounting for around 63 per cent.

Gas revenues are estimated at nearly RO800m.

The Ministry's monthly bulletin showed the jump in oil prices in the first four months of this year boosted Oman's fiscal surplus by more than six times to RO711.6m from RO100.9m in the first four months of 2009.

A projected deficit of around RO810m in 2009 was slashed to only RO22.2m.

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