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16 April 2024

Oman oil output rises 6.4 per cent in 2008

By Nadim Kawach

Oman boosted its crude output by more than six per cent in 2008 as the Gulf country is pushing ahead with a major development programme to reverse a steady decline in its oilfields, official figures showed yesterday.

From around 710,000 barrels per day in 2007, the country's oil production climbed to nearly 756,000 bpd in 2008, an increase of 6.4 per cent, showed the figures by the Oman Ministry of National Economy.

But the average output last year fell short of the 790,000 bpd target set by the government in its 2008 budget and was far below the peak output of around 900,000bpd recorded in 2002, according to the report.

The increase last year was in line with plans by the government to push up crude output after a steep fall in production over the past five years because of lower than expected oil investment to fund gas projects. Production has steadily receded during that period, dropping from 328 million barrels in 2002 to 299 million barrels in 2003 and 285 million barrels in 2004. It reached 283 million barrels in 2005 and 269 million barrels in 2006.

Production dived to 259 million bpd in 2007 but the government said last year output would recover as it based its 2008 budget on higher oil production.

In 2008, the government announced plans to invest nearly $10 billion until 2011 to lift crude output capacity to 900,000bpd and increase gas supplies.

Higher production combined with strong crude prices last year to boost Oman's fiscal surplus to a record high level in the first 11 months despite a sharp rise in actual expenditure, according to official figures.

The budget surplus totalled around RO1.979 billion (Dh19bn) during January-November and experts believe it would smash through the RO2bn mark by the end of the year for the first time in the country's fiscal history.

Higher output and prices pushed up Oman's total income to an all time high of around RO7.77bn in the first 11 months, far higher than the revenues for the whole 2007. Oil export earnings swelled to a record RO5.439bn, more than 70 per cent of the total revenues.

The figures showed China was the largest importer of Omani oil last year after ousting Japan from the top position, receiving around 105 million barrels, an average 287,000bpd, nearly 38 per cent of Oman's total crude output.

Japan came second, with around 30 million barrels, followed by Thailand, which imported nearly 25 million barrels, the report showed.

Strong oil prices have turned Oman's fiscal deficits into surpluses over the past six years and sharply stimulated its economy, which galloped by nearly 13 per cent from about RO13.73bn in 2006 to RO15.5bn in 2007.