BMI's Executive Summary

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The Sector At A Glance

Key Insights On The Oil & Gas Sector Of Oman

The latest Oman Oil & Gas Report from BMI forecasts that the country will account for just 0.58% of MEA regional oil demand by 2010, while providing 2.01% of supply. MEA regional oil demand rose to 10.7mn b/d last year and should average 10.9mn b/d in 2006, before reaching 12.2mn b/d by 2010. MEA gas consumption in 2005 was 343bcm, with demand of 533bcm targeted for 2010. Production last year of 448bcm should reach 774bcm by the end of the decade. Oman’s share of consumption in 2005 was 2.04%, while its contribution to production was 3.75%. By 2010, its share of demand is forecast to be 1.69%, with the country accounting for 4.13% of supply.

Assuming an uneventful Q4, we are now predicting an OPEC basket price for 2006 averaging US$61.10/bbl – an increase of US$1.10 from our June forecast. This also represents a 19% rise from the FY05 average. Our forecasts for the US, Brent and Urals are US$66.40, US$65.40 and US$61.60/bbl respectively. For 2007, we continue to assume an OPEC basket price of US$50/bbl, which implies US$55.40 for the US, US$53.40 for Brent and US$49.50 for Urals. Prices are then forecast to fall by around US$5/bbl in 2008-2010, with the OPEC price averaging US$45/bbl over the period.

Oman’s real GDP growth is forecast by BMI at 4.3% for 2006, following 3.2% in 2005. We are assuming 4.2% growth in 2007 and 3.4% in 2008, followed by 3.2% in 2009 and 4.4% in 2010. We expect oil demand to rise from 56,000b/d last year to 71,000b/d in 2010, representing 5.0% annual growth that exceeds our underlying economic assumptions. Partly state-owned PDO accounts for more than 90% of the oil and gas produced in the country, but relies on IOCs to maintain volumes. Our estimates assume 780,000b/d of 2006 oil and liquids production, followed by a short-lived rally back to the 800,000b/d level in 2008/09, before volumes again sink to 780,000b/d by the end of the forecast period. However, there is a high risk that production will stabilise at a level nearer 750,000b/d. Gas production should reach 32bcm by 2010, up from 17.5bcm last year. Consumption is expected to rise from 7.2bcm to 9.1bcm by the end of the forecast period, allowing exports of 22.9bcm.

In the BMI Business Environment Ranking matrix, Oman this quarter receives a slightly lower composite score of 31, which now ranks the country equal eighth out of 16 states included in the MEA region, alongside Algeria, Bahrain and Egypt. The country's overall business environment can be considered pretty neutral in a regional context, thanks largely to a low level of perceived political risk, being offset by higher economic risk, while Oman's sensible licensing/regulatory regime and a reasonably competitive environment is let down by a lack of substantial oil or gas upside potential.

Contents

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Chapter 1 - Executive Summary

Chapter 2 - SWOT Analysis

Oman Political SWOT

Oman Economic SWOT

Oman Business Environment SWOT

Chapter 3 - Regional Market Overview

Middle East/Africa Region

Table: MEA Oil Consumption (000b/d)

Table: Middle East/Africa Oil Production (000b/d)

Table: Middle East/Africa Oil Refining Capacity (000b/d)

Table: Middle East/Africa Gas Consumption (bcm)

Table: Middle East/Africa Gas Production (bcm)

Table: Middle East/Africa LNG Exports/(Imports) (bcm)

Oman

Chapter 4 - Business Environment Rankings

Oman

Middle East/Africa Region

Chapter 5 - Oman Business Environment Ranking

Economics – long-term risk

Politics – long-term risk

Oil & Gas Growth

Oil/Gas Reserves

Licensing/Regulation

Competitive Environment

Chapter 6 - Business Environment Overview

Political Risk Summary

Economic Risk Summary

Business Environment Risk Summary

Legal Framework/Corruption

Foreign Direct Investment

Tax Regime

Chapter 7 - Oil Market Outlook

Table: Crude Price Forecasts 2006

Revised Forecasts

Table: Oil Price Forecasts

Chapter 8 - Regional Supply and Demand

Middle East/Africa

Table: Oil Production (000b/d) – Middle East/Africa

Table: Oil Consumption (000b/d) – Middle East/Africa

Chapter 9 - Global Picture

Table: Global Oil Consumption (000b/d)

Table: Global Oil Production (000b/d)

Chapter 10 - Industry Forecast Scenario

Oil and Gas Reserves

Oil Supply and Demand

Gas Supply and Demand

LNG

Refining and Oil Products Trade

Revenues/Import Costs

Table: Oman Oil & Gas – Historic Data & Forecasts

Other Energy

Table: Oman Other Energy – Historic Data & Forecasts

Key Risks to BMI’s Forecast Scenario

Chapter 11 - Economic Outlook

Table: Oman: Macroeconomic Data And Forecasts

Chapter 12 - Country Snapshot: Oman Demographic Data

Section 1: Population:

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education & Healthcare

Table: Education

Table: Healthcare: Vital Statistics

Table: Healthcare: Expenditure

Section 3: Labour Market And Spending Power

Table: Employment Indicators

Table: Consumption and Stratification

Chapter 13 - Regional Case Study

Global Player With Conflicting Domestic Needs

Chapter 14 - Competitive Landscape

Executive Summary

Table: Key Companies in Oman Energy Sector

Overview/State Role

Shell – Summary

OOC – Summary

Table: Key Upstream Players

Total – Summary

CNPC/Sinopec – Summary

EnCana – Summary

Table: Key Downstream Players

Occidental – Summary

PTTEP – Summary

Chapter 15 - Company Monitor

Petroleum Development Oman (PDO)

Shell Oman

Company Analysis

SWOT Analysis

Oman Oil Company (OOC)

Company Analysis

SWOT Analysis

Chapter 16 - BMI Forecast Modelling

How we generate our industry forecasts

Energy Industry

Cross checks

Sources

Chapter 17 - Appendix: Regional Demographic Data

The Long View: Data Over The Economic Cycle (2000-2007)

Population

Household Spending Per Capita, US$

Private Consumption Per Capita, US$ PPP

Market Size, GDP, US$bn

Network of Middle Eastern and African Oil and Gas Sources

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BMI's Middle Eastern and African Oil and Gas Reports are based on an extensive network of multilateral organisations, government departments, oil and gas industry associations, chambers of commerce and company reports. Information sources include: