Introduction: Geography and Strategic Role of the Middle East
Oman, officially known as the Sultanate of Oman, is a monarchy located in the eastern part of the Arabian Peninsula. According to Chemframe, the country is divided into 11 governorates, with its capital in Muscat and other major cities being Sohar, Sur, Duqm, and Salalah. Oman has a population of about 4.6 million and an area of approximately 309,500 square kilometers. The Middle East can be considered the most significant player in the global oil and gas industry in Oman, as it holds approximately half of the world’s proven crude oil reserves and one-third of its natural gas reserves. Additionally, much of the oil and gas industry in Oman, including the oil and gas companies in Oman, and the petrochemical value chain has developed in this region, making it a highly influential part of the global economy.
Oman’s Oil and Gas Reserves and Production
Oman possesses 4.9 billion barrels of crude oil reserves and 680 billion cubic meters of natural gas reserves, ranking 23rd and 28th in the world, respectively, and seventh among Middle Eastern countries. The country’s crude oil production stands at around 1015 million barrels per day, of which 850 thousand barrels per day are exported. Oman also produces about 137.2 million cubic meters of natural gas per day and, alongside imports of 5.2 million cubic meters per day, meets its domestic demand of 142.6 million cubic meters per day. From 2010 to 2022, Oman’s natural gas production increased by around 50%, reflecting economic growth, industrial expansion, and rising demand for natural gas as a clean fuel. Although Oman’s oil and gas reserves are modest compared to other Middle Eastern states, its strategic geopolitical position and relatively small population have greatly supported the development of its oil and gas industry in Oman, with oil and gas companies in Oman playing a key role, securing Oman’s role in the global energy market and creating a strong appeal for investors.
Major Oil and Gas Fields
Most of Oman’s oil and gas fields are concentrated in Block 6, which contains about 80% of the country’s proven reserves. The main oil and gas fields include Barik, Fahud, Khazzan, Lekhwair, and Marmul. These fields also support the activities of oil and gas companies in Oman and the Oman petrochemical company, contributing to the broader development of the country’s energy sector.
Dependence on Oil Revenues and Export Markets
Oman is the largest non-OPEC oil producer, and its economy is significantly dependent on the oil and gas industry in Oman, with over 67% of government revenue derived from it. Omani crude is marketed under the name Oman Blend, with an API gravity of 32, classifying it as light crude oil. China is the primary destination for Oman’s crude oil exports, accounting for about 92% in 2023. Other key importers include India, Japan, and South Korea.
Refining Sector Development
Oman has three refineries with a combined capacity of 534,000 barrels per day. The Mina Al-Fahal refinery, established in 1982, has a capacity of 106,000 bpd. The Sohar refinery began operations in 2006 with a capacity of 116,000 bpd, later upgraded to 198,000 bpd through an expansion project. The Duqm refinery, a 50-50 joint venture between Oman Oil and Kuwait Petroleum, started operations in late 2023 with a daily refining capacity of 230,000 bpd. Due to its strategic location along one of the world’s most critical trade routes, the Duqm refinery plays a vital role in supplying feedstock to Oman refineries and petrochemicals company and Oman’s petrochemical industries.
Refined Products and Petrochemical Growth
Diesel and gasoline are among the main refined products of Oman. Naphtha is the most consumed domestic product, with about 81% of production used locally. All propylene produced in Oman is consumed internally for downstream products such as polypropylene. In recent years, Oman has pursued enhanced oil recovery projects, new exploration, and attracting foreign investment to adopt advanced technologies, expand refining capacity, boost exports of refined products, and develop its Oman petrochemical company sector.
Key Companies: PDO, Oman LNG, and OQ
Among the oil and gas companies in Oman, the Petroleum Development Oman (PDO) company, owned 60% by the government, is one of the country’s leading oil and gas exploration and production companies, holding the largest share of crude and natural gas output. The company began exploration in 1962 and exported its first crude oil in 1967. In 1994, Oman LNG L.L.C. was established by royal decree to liquefy and market natural gas and condensates. Today, Oman LNG has a liquefaction capacity of 11.4 million tons per year. In 2019, to diversify Oman’s economy and expand the oil and gas value chain, the brand OQ was launched, bringing together 9 major companies, including Orpic, Oman Oil, Oman Gas, the Duqm Refinery, Salalah Methanol, and Salalah LPG. Currently, OQ operates in 17 countries, covering the full value chain from exploration and production to refining, petrochemicals, marketing, and distribution in more than 80 countries. OQ produces a wide range of products, including amines, aldehydes, esters, alcohols, carboxylic acids, methanol, ammonia, and polyethylene and polypropylene grades. Oman’s petrochemical industries company’s base production capacity is around 7 million tons per year, mainly methanol and ammonia. The country produces about 12 million tons of petrochemicals annually, ranking fifth in the Middle East after larger producers.
Conclusion
As mentioned, more than 67% of Oman’s revenues come from oil and gas industry in Oman, yet the country has actively pursued foreign investment, new oilfield exploration, increased recovery, and higher exports. Its recent projects and new facilities, such as the Duqm refinery and Salalah ammonia plant, reflect Oman’s strategy to expand its midstream and upstream industries.
In recent years, Oman has shifted from being a natural gas exporter to an importer. In 2023, the country’s combined gas production and imports increased by about 3.6% compared to 2022, ensuring feedstock supply for downstream industries and supporting natural gas as a clean, low-cost energy source. Currently, about 92% of Oman’s electricity is generated from natural gas, reducing reliance on diesel for power generation by 26%. Additionally, Oman—through companies such as Oxy Oman and bp Oman—seeks to cut greenhouse gas emissions and promote methanol and ammonia as green fuels, strengthening its Oman petrochemical company sector.
Overall, Oman can be viewed as a developing country with a clear strategy—pursuing economic growth while preserving its cultural heritage and traditions. The nation has experienced solid economic progress, with GDP rising by 42% compared to 2017, and has successfully achieved 89% workforce localization in its oil and gas sector.