Oman - Country Commercial Guide
Oil & Gas
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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’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. In June 2022, the Ministry of Energy and Minerals (MEM) announced that Oman’s crude oil reserves stood at 5.2 billion barrels, and gas reserves at around 24 trillion cubic feet. MEM also announced that it had made new oil discoveries that would raise Oman’s production by 50,000 to 100,000 barrels in the coming two to three years.

The 2020 oil price crash hit the sector hard, but it has recovered with a rebound in oil prices to above pre-pandemic levels. Oman’s 2023 government budget estimated revenues of $26.1 billion, based on average oil prices of $55 per barrel, with oil and gas accounting for 53 and 14 percent of total revenue, respectively. The government reported revenues of $16.5 billion in the first half of 2023 based on an average oil price of $87 per barrel, with a partial-year budget surplus of $1.7 billion.

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, integrating several government-owned upstream, midstream, and downstream oil and gas entities. The OQ group has participating interests in four producing blocks, one non-producing block, and five exploration 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.

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, which OQ projects will produce 0.5 billion cubic feet of gas per day by 2024.

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 scheduled to open by the end of 2023 with a capacity of 230,000 barrels per day.  Planning continues for the $10 billion Duqm petrochemical complex project.

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.


Oman will offer a new batch of oil and gas concession areas by the end of the first quarter of 2023, including onshore and offshore blocks.

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. 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.


Ministry of Energy and Minerals

Petroleum Development of Oman


Business Gateways - Joint Supplier Registration System

Oman Petroleum and Energy Show