Oman will not reduce oil and gas spending in 2015
The sultanate will maintain the same capital expenditure despite falling crude oil prices
Oman has no plans to reduce its capital expenditure for the oil and gas industry next year despite falling crude oil prices, Muscat Daily reported.
“Not for 2015 ... for next year we know it (lower oil price) is not going to impact our (capex) program, because we already have set what exactly we are going to do. Beyond 2015, it will depend on how oil prices trend, going ahead,” said Salim al Aufi, Undersecretary of Oman's Ministry of Oil and Gas.
While oil prices are trending lower, the Omani oil and gas industry remains profitable.
“The oil and gas program is fuelling the economy and is the main source of revenue for the government. It will probably be the last program to be impacted before we start seriously thinking about cutting down on activities,” he added.
Turning to impact of lower crude oil prices on the petroleum services providers, Aufi noted that these firms “depend on activity levels and for the time being we are not altering our plans. If, beyond 2015, we decide to cut down on activity then I expect them to be gradually affected.”
Oman has set oil production target for next year at 980,000 barrels per day, up from 950,000bpd in 2015.
“Our projects are very attractive and generate much revenue. So it would not make economic sense to slow them down, said Raoul Restucci, managing director of Petroleum Development Oman (PDO), adding that capex on its gas projects to average between $1.5bn and $2bn a year, going forward.
Oman's government has a 60% interest in PDO, which accounts for more than 70% of the country's crude oil production and nearly all its natural gas supply.