Oman signs oil and gas concession agreement with Lebanon’s CC Energy Development

The agreement reflects Oman's commitment to expand exploration and prospecting for oil and gas, sultanate's energy minister says

Oil and gas installations near Muscat, Oman. Reuters

Oman’s energy ministry has signed a concession agreement with Lebanon’s CC Energy Development Company for oil and gas exploration in two concession areas in the Dhofar province.

The agreement reflects the commitment to expand exploration and prospecting for oil and gas resources in the sultanate, Salem Al Awfi, Oman’s Minister of Energy and Minerals, was quoted as saying on Sunday by Oman News agency.

The confidence that Oman enjoys from local and international investors will also contribute to enhancing the productive capacity of the sector, Mr Al Awfi said.

Oman, the largest non-Opec crude oil producer in the Middle East, in November said that total investment in oil and gas exploration, production and development in the country reached $5.84 billion in the first half of 2023.

Capital expenditure, including geological surveys, drilling and facilities, made up for 62 per cent of the total investment, while 38 per cent was allocated to operating expenses, Oman News Agency reported at the time.

Salah Al Dhahab, director general of investment at Oman’s energy ministry, hopes that the results of the geophysical surveys in the two areas are successful to proceed to the drilling phase.

In December, the sultanate announced an additional crude oil voluntary reduction of 42,000 barrels per day for the first quarter of this year.

The reduction was part of voluntary production curbs of 2.2 million bpd announced by members of the Opec+ alliance, which includes Opec countries and allies such as Russia, Oman, Bahrain and Azerbaijan.

Oman’s production hit 1.05 million bpd at the end of September 2023.

Like other Gulf countries, Oman benefitted from a surge in crude prices following Russia's invasion of Ukraine. The country's economy grew by 4.3 per cent in 2022, but is estimated to record an expansion of only 1.3 per cent in 2023 due to production cuts and lower oil prices.

Crude prices posted their biggest annual drop since 2020, with Brent, the international benchmark for two thirds of the world's oil, ending 2023 at $77.04 per barrel, down more than 10 per cent on a yearly basis.