Continued investments to expand the oil and gas sector, research and development and transition towards cleaner energy will have real positive impact on the economy, job creation and socio-economic development in general, says Walid Hadi, Country Chairman, Oman Shell
How do you foresee Oman’s economic growth in 2020? And please share your industry outlook for 2020 and beyond…
A combination of increased economic diversification efforts and a recovery in oil prices means that Oman’s economy is showing improvements across most major indicators for 2019 and that it is poised for growth despite the challenges in global markets and fluctuating oil prices. The World Bank’s Economic Monitor predicts that Oman’s growth rate is expected to reach six per cent in 2020.
Oman continues to work towards making it easier to do business. The government’s growth strategy often calls for collaboration with the private sector. At Oman Shell, we value our partnership with the Ministry of Oil and Gas as we leverage innovation together as a key enabler for growth. We also welcome the government’s efforts to create an organised and favourable regulatory environment to stimulate investment in all fields that serve the objectives of Oman’s vision for the future, while promoting the competitiveness of the national economy globally. This will enhance the Sultanate’s appeal as a destination for foreign direct investment (FDI).
From an energy sector perspective, the production of new fields will also contribute to the growth of Oman’s economy. Thanks to returns from the Tanfeedh programme for economic diversification, as well as continued investments to expand the oil and gas sector, research and development and transition towards cleaner energy, coupled with the Sultanate’s world-class infrastructure, all of these elements will have real positive impact on the economy, job creation and socio-economic development in general.
How was the year 2019 for Shell Oman and the Sultanate’s energy sector in general?
2019 was a year of change in our company, with rebranding to Oman Shell to maintain our focus on putting Oman first in everything that we do, growing as we secured new blocks and recruited the best Omani talent to join our diverse team, moving to our new office location, expanding our horizons with renewables in the Sultanate and achieving great milestones with our longtime partners in PDO and Oman LNG.
Today, Shell has interests in Petroleum Development Oman (PDO) (34 per cent), Oman LNG (30 per cent), Shell Oman Marketing Company (49 per cent) and, more recently, operatorship in Block 42 (50 per cent) and Block 55 (100 per cent).
Building on these successful partnerships and looking to new horizons, in February 2019 Shell signed an interim upstream agreement with the Sultanate’s Ministry of Oil and Gas, covering investments in exploration for and production of natural gas, operated by Shell, in partnership with Total and Oman Oil Company and Orpic Group (OQ), as well as the potential development of a gas-to-liquid (GTL) plant, in partnership with OQ.
For Oman, the upstream developments will assist in meeting its growing energy needs, help to stimulate industrial and economic development and promote innovation to diversify the country’s energy sector. For Shell, the developments align with our strategy of building a resilient and relevant global portfolio that contributes to Shell’s ambition to be a globally-attractive investment proposition. These projects will also accelerate Oman Shell’s contribution to the Government’s in-country value strategy.
Overall, this was a defining year for Oman Shell, and we look forward to seeing these new developments bring about accelerated growth in the industry, contribute to the Government’s in-country value strategy and bring long-term value for both Oman and Shell.
What are the future plans and major areas of innovation for your company in 2020?
Our future plans stem from Shell’s new purpose of powering progress together through providing more and cleaner energy. Gas, the cleanest-burning hydrocarbon, will play a major role in our portfolio in Oman. Huge investments in infrastructure to produce and transport it indicates that the gas network is advancing – including liquified natural gas (LNG) and Gas to Liquids (GTL). Along with our partners in OQ and Total, and we hope to embark on similar projects in Oman to support the Sultanate’s vision and increasing energy demands.
Furthermore, Shell is already a willing and able player in the energy transition. We see a commercial and environmentally sustainable opportunity in contributing in the global drive to provide more and cleaner energy solutions, and gas is one of the few energy sources than can be used across all sectors of the Sultanate’s economy – to fuel transport, power homes and industries. We aim to reduce the carbon intensity of our portfolio globally and in Oman, as we continue to work on improving the energy efficiency of our existing non-operated interests.
The global move towards a lower carbon energy system represents an opportunity for Oman Shell to extend its longstanding partnership with the Sultanate into the next decades, building on what was achieved in the past and helping to meet its growing energy needs and its ambitions to diversify the national economy and government revenues. This forms a robust foundation to explore future business opportunities.