Overview
Oil has been the driving force of the Omani economy since Oman began commercial production in 1967. The oil industry supports Oman’s modern and expansive infrastructure, including electric utilities, roads, public education, and medical services.
Oman can produce upwards of one million barrels per day of crude oil and condensates, but honors OPEC+ quotas. Oman produced 775,000 barrels per day (bpd) in mid-2025 and, as a member of OPEC+, can alter production based on the consensus of the group. Oman’s oil reserves primarily consist of heavy crude, and China is the predominant export market. Oman’s government derives roughly 70 percent of its annual budget from oil and gas revenues through taxation and joint ownership of some of the most productive fields, and the industry accounts for 30 percent of Oman’s gross domestic product. By the end of 2024, Oman’s crude oil and oil condensates reserves stood at approximately 4,825 million barrels, and natural gas reserves at about 23 trillion cubic feet.
Oman’s Ministry of Energy and Minerals (MEM) coordinates the government’s role in Oman’s hydrocarbon sectors. State-owned Petroleum Development Oman (PDO) holds most of Oman’s oil reserves and is Oman’s largest oil and gas operator. U.S. firm Occidental Petroleum is the second–largest operator after PDO and has the largest presence of any foreign firm in Oman. In 2019 Oman created a state energy company, OQ, by integrating several government-owned upstream, midstream, and downstream oil and gas entities. The OQ group has participating interests in 14 operating and non-operating oil and gas blocks, both onshore and offshore Oman. Government-owned holding company Energy Development Oman (EDO) represents the government’s stake in PDO and raises financing for projects.
PDO continues to target cost efficiencies in operations, while ramping up its In Country Value (ICV) strategy to generate jobs and training opportunities for Omani nationals and promote Omani SMEs. It is also investing heavily in alternative energy by using solar power to generate steam for enhanced oil recovery, which also helps maintain production of crude oil in mature and geologically complex oil fields.
In February 2025, MEM invited investors to explore oil and gas in three concession areas: Block 43A, Block 66 and Block 36. Exploration licenses have been awarded for these blocks before, but companies failed to find hydrocarbon reserves. These concession blocks are large, and MEM believes that additional exploration could prove successful. MEM has tasked OQ to assist in the joint marketing of as many as 11 new concession blocks planned in 2025.
Oman also has natural gas reserves that may play a leading role in fueling industrial growth in the coming years. BP produces over 1.5 billion cubic feet of gas per day from the Khazzan field. OQ, together with Shell and TotalEnergies, began producing gas from Block 10, and Shell is looking to explore more wells after production reached over the plateau target of 500mn ft³/d (5.2bn m³/yr) in May 2024. In May 2025, Occidental reported a significant gas and condensate discovery in North Oman, with estimated in-place resources exceeding 250 million barrels of oil equivalent. U.S. company Petrotel is looking to commercialize its oil discovery in Block 17 in the northern Musandum peninsula and found gas and heavy oil reserves in Blocks 39 and 67.
Further downstream, Oman is making a push towards manufacturing and value-added processing through refining and petrochemicals projects such as the completed Sohar Refinery Improvement Project, and construction on the $7 billion OQ8 refinery in Duqm (a Kuwaiti joint venture), which is the largest industrial investment in the country and opened at the end of 2024 with a capacity of 230,000 barrels per day. Planning continues for the $10 billion Duqm petrochemical complex project which, if executed, could dramatically change the landscape of Oman’s newly built deep-water port. In May 2025, TotalEnergies and OQ broke ground on Marsa LNG, a low-carbon LNG production plant and marine bunkering hub in Sohar.
Leading Sub-Sectors
The following are some of the leading sub-sectors in Oman’s oil and gas sector: drills and drilling services, hydraulic fracturing (“fracking”) technology and services, refinery equipment, oil extracting equipment, sand removal devices for crude oil, boilers, drilling rods, separators, burners in mobile tanks, pipeline heating for heavy crude, water treatment systems, quality inspection, steam injection, and other enhanced oil recovery technologies. Other promising sub-sectors include gas plants, pipelines, flow lines, well pads, wells, compressors, rigs, frack spreads, operations support, and infrastructure.
Opportunities exist across upstream exploration and production (with condensate and enhanced oil recovery as key drivers), downstream refining and petrochemicals, LNG production and export, gas-based industrial development, and emerging sustainable energy integration. While upstream and downstream activities dominate, LNG and gas-based industries are critical for diversification, with sustainable energy gaining traction.
Opportunities
The oil and gas sector continues to provide some of the best prospects for U.S. goods and services. A significant portion of the country’s oil infrastructure is aging, which provides a market for pipelines, wellheads, pumps, and related equipment. Additionally, Oman has several older fields and fields with complex geology, and the first serious offshore exploration began in 2017. As a result, Oman needs advanced technology such as 3-D seismic analysis to facilitate exploration efforts and the AI capability to analyze vast amounts of data. Some in Oman’s oil and gas sector are interested in computer systems that can monitor remote wells and cut labor costs.
Analysts expect investment to shift towards maximizing output from cost-effective reservoirs using innovative technologies to cut costs and eliminate waste. PDO has pledged to eliminate routine gas flaring by 2030, in line with the World Bank’s Zero Routine Flaring initiative. The Omani government has been investing in liquid bulk storage and hydrocarbon logistics projects in country. Oman is not yet a major refined petroleum product producer but has plans to expand its refining and storage sectors.
Important technical advances are underway in oil discovery and recovery in Oman’s onshore blocks. Industry experts assess great potential for new operations in the country’s offshore blocks, the first major exploration of which began in 2017. Omani officials have expressed particular interest in proven fracking technologies, presenting opportunities for American companies and their suppliers. Oman will continue to turn towards more innovative and unconventional oil recovery methods to cut costs and increase efficiencies. Many multinational companies operating in Oman are drawing on their experiences from the U.S. market, primarily in relation to shale production.
Oman’s National Energy Strategy aims to derive 30 percent of electricity from renewable sources by 2030. There are opportunities in renewable energy as Oman pursues economic diversification and explores alternatives to hydrocarbons for power generation. Alternative energy supplies could allow Oman to offset substantial domestic consumption of fossil fuels used in electricity production and desalination, the source of most of Oman’s potable water. Substituting alternative energy for fossil fuels in these areas could help Oman generate additional revenues through increased oil exports.
Oman announced plans to monetize certain hydrocarbon assets, including through asset sales and debt issuance, in response to the COVID-19 pandemic’s impact on state finances. MEM’s Taqa platform grants investors access to all services offered by the ministry.
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