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Oman

Beyond oil score(out of 100 points) 58.5
Index ranking(out of 26 countries ranked) 11
Overall status*  
General Economic Framework  
Political Framework  
Society and Future Skills  
(Beyond) oil related factors  


According to US Department of Energy, Oman has proven recoverable oil reserves of 5.5 billion barrels, the bulk of which are located in the country's northern and central regions. Oman's oil fields are generally smaller, more widely scattered, less productive, and more costly per barrel than in other Persian Gulf countries. The average well in Oman produces only around 400 barrels per day (bbl/d), about one-tenth the volume per well of those in neighboring countries. To compensate, Oman uses a variety of enhanced oil recovery (EOR) techniques.

Oil plays a major part in Oman's economy, however its overall impact is changing. This is due to the fact that according to a number of estimates Oman's oil resources will be depleted by the year 2022. As a result the Omani government has embarked on its “vision 2020” plan which aims to diversify the economy away to a level whereby the year 2020 the share of the oil sector on the country's GDP will only be 9%. In this case increase in export of non oil products is expected to make up for absence of income from oil. So far the results of Oman’s “vision 2020” plan have been promising. Recent figures show that Oman's non oil exports grew by 38% in value in the year 2003-04. Its is expected that this figure will increase a further 20% for the year 2004-05. Meanwhile Omani government investment in the economy includes other facets, such as investment in Oman's infrastructure, including its roads, airports and especially its sea ports. This investment has made transportation inside and outside Oman a more efficient process and has thus produced a positive impact on the level of investment, trade and economic growth in Oman. Furthermore continued investment in Oman's ports have given a boost to Oman's shipping, gas exports and goods re-export trade. At the same time the free trade areas created in ports such as Salalah have made the goods re-export industry and the free trade sector one of the major non oil areas of growth in the Omani economy. Major investments have also been made in the gas sector. Meanwhile the Omani government has made hefty investments in its sea ports infrastructure in order to enable super tankers to carry its gas in a liquefied form (LNG) to its customers.

Tourism also plays a large part in the Omani government's diversification plans. Recent foreign participants include Dubai International Properties which has just won an $820 million. The manufacturing sector is another player in the vision 2020 diversification plan. The Omani government has focused on light manufacturing and manufacture of household goods as one of the main areas of growth. Furthermore Oman's entry into the World Trade Organisation (WTO) in the year 2000 and its Customs Union agreement with its GCC neighbours have further improved trade and investment conditions in the country. Further boost in trade is expected after the US Congress approves the Free Trade Agreement between US and Oman.

Beyond Oil summary

Oman’s 2020 vision is one of the original Beyond Oil plans of the Middle East. So far it has ensured that Oman stays on the correct path. However one of the biggest downfalls of the Omani Beyond Oil plan is lack of future industries such as High tech and high value industries. Oman’s small oil reserves, plus high extraction costs also compound its the problems faced by Beyond Oil industry.

  Indicates high preparedness   Indicates deficits but potential for development   Indicates unfavourable preconditions.
 
     
   
 
 
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