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Oman expects its crude oil production in 2008 to recover to its highest level in five years as heavy upstream investments and new concessions to foreign companies have reversed a steady decline in its output.
The country, which is not an Opec member, said it would pump nearly 790,000 barrels per day in 2008 and expected this to sharply boost its crude export earnings despite its conservative forecasts for oil prices.
The projected production level is sharply higher than the 2007 output of about 714,000bpd and above the 2006 production of 736,000 bpd. Output was estimated at about 780,000bpd in 2004, while it was as high as 819,000bpd in 2003 and at its peak of nearly 898,000 bpd in 2002.
Announcing the 2008 state budget on Tuesday, Minister of National Economy Ahmed bin Abdulnabi Macki said it was based on $45 a barrel for Omani crude, nearly half the current price. “We assume oil production at an average 790,000bpd and this will boost our oil export revenues to RO3.61 billion [Dh34.44bn], accounting for nearly 67 per cent of the total revenues,” the minister told reporters in Muscat. He added that gas earnings would peak at about RO620 million, nearly 11 per cent of the total revenue, compared with less than RO200 in 2000.
Oman, which controls five billion barrels of proven oil reserves, has been locked in a drive to revive its oil production after a steady decline over the past few years, as it has shifted emphasis on expanding its LNG production.
In 2006 and 2007, the government signed several exploration and production accords with international firms and officials expect such deals to produce results in the medium and long term as many areas remain unexplored. A large chunk of the envisaged investments for the nation’s seventh development plan was also allocated to the oil sector.
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