THE OIL & GAS YEAR The Who s Who of the Global Energy Industry

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1 THE OIL & GAS YEAR The Who s Who of the Global Energy Industry ARTICLES INTERVIEWS VIEWPOINTS MARKET ANALYSIS RESOURCES PROJECTS MAPS INVESTOR SPOTLIGHTS A fine balance ISBN OMAN 2015 H.E. Salim bin Nasser AL AUFI Undersecretary of the Ministry of Oil and Gas Blessing in disguise Raoul RESTUCCI Managing Director PETROLEUM DEVELOPMENT OMAN The long view Usama BARWANI CEO PETROGAS E&P

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4 OMAN 2015 THE OIL & GAS YEAR The Who s Who of the Global Energy Industry In partnership with: CONTENTS OMAN Content partners: 14 Diplomacy & Politics Oman strives to maintain positive relations with countries in its region, pursuing strong and stable diplomatic and economic ties. Muscat is now uniquely positioned for economic co-operation with Iran as its neighbour across the Strait of Hormuz opens new trade ties. The sultanate s quiet approach to foreign relations has benefited its stability at home and opportunities for trade abroad. 26 Exploration & Production Omani oil production reached 992,700 barrels per day in June The country s target is 980,000 barrels per day for the year. The government is expanding its push to step up the use of enhanced oil recovery techniques in its maturing assets and heavy oilfields, an approach that has turned around a decline in output over the past decade. Developments such as the Khazzan tight gas project and Amal West s heavy oil extraction are expected to boost production in coming years. 6 THE YEAR IN REVIEW 7 VIEWPOINT: H.E. Salim bin Nasser Al Aufi, Undersecretary of the Ministry of Oil and Gas 8 THE YEAR S AWARDS 9 OMAN AT A GLANCE 10 THE INVESTORS INDEX 11 INTERVIEW: Jonathan Wilks, UK Ambassador to Oman 12 THE YEAR IN ENERGY 14 DIPLOMACY & POLITICS 15 ARTICLE: The power of pragmatism. Oman s approach to diplomatic relations positions it well for trade 16 INTERVIEW: Musallam Al Mandhari, Oman Society for Petroleum Services 16 IN EMPLOYMENT: Projected 2020 demand for employees in selected sectors of the oil and gas industry 17 MARKET ANALYSIS: Seoul position. Kim Daesik, South Korean Ambassador to Oman 17 IN TRADE: Oman s crude oil exports by destination, INTERVIEW: Shahswar Al Balushi, Oman Society of Contractors 20 THE STRATEGIC ROUNDTABLE 21 PARTICIPANTS 22 SECTOR FOCUS DEBATE 26 EXPLORATION & PRODUCTION 27 ARTICLE: Steady gains. Enhanced recovery helps raise output 28 INTERVIEW: Raoul Restucci, Petroleum Development Oman 30 OPERATIONS REPORT: The Khazzan tight gas project. Yousuf Mohammed Al Ojaili, BP Oman 30 RESOURCE: BP s major global gas projects and reserves 31 COMMENT: Price losses, production gains. Output up in dip 32 INTERVIEW: Said Al Adawi, Intaj 33 RESOURCE: Production and exports through the oil price slowdown 34 COMPANY PROFILE: Occidental of Oman 35 PULLOUT MAP: Oman s oil and gas blocks, COMPANY PROFILE: Mitsui E&P Middle East 38 PROJECT HIGHLIGHT: Block 66 development 39 COMMENT: Regional rollback. Privatisation is on the horizon 40 INTERVIEW: Magnus Nordin and Fredrik Robelius, Tethys Oil 41 COMMENT: A hard sell. Muscat seeks foreign investment 42 INTERVIEW: Anil Chopra, PetroTel 43 INVESTOR SPOTLIGHTS: Daleel Petroleum, Masirah Oil, Partex Oil and Gas 44 INTERVIEW: Salim Al Sibani, OOCEP 44 IN ASSETS: OOCEP s assets 45 COMMENT: Investments in jeopardy. Low oil prices lead companies to pull out of costly production in Oman 46 COMPANY PROFILE: CC Energy Development 47 INTERVIEW: Chris Breeze, Shell Development Oman 47 RESOURCE: Historical timeline of Shell in Oman 48 RESOURCE: PDO s enhanced oil recovery projects and trials FOLDOUT RESOURCE: OOC s international investments 49 INTERVIEW: Usama Barwani, Petrogas E&P 50 GEOLOGY REPORT: Structural styles of hydrocarbons reservoirs 50 RESOURCE: Oman s hydrocarbons reservoirs 51 IN THE REGION: Oman's crude oil and condensate exports in 2014, compared with OPEC countries 52 THE YEAR S FOCUS: Development of SLCCs & LCCs 53 ARTICLE: Lead by example. The Omani government takes a collaborative approach to localisation 54 INTERVIEW: Hamoud Al Tobi, Al Shawamikh Oil Services 55 ARTICLE: Localisation for a strong economy. Efforts are underway lower the country s high unemployment rate 56 COMPANY PROFILE: Al Sahari Oil Services Company 57 COMMENT: Strengthen the economy through SMEs. Economic diversification through small business support 58 INTERVIEW: Saif Said bin Rashid Al Darai, Seeh Al Sarya Engineering 58 IN SPENDING: Yearly spending on LCCs and SLCCs by PDO 59 ARTICLE: SLCCs and LCCs in a nutshell. A guide to understanding the SLCC and LCC schemes 60 IN PROGRESS: SLCC contracts and shareholders 61 INVESTOR SPOTLIGHTS: Hamraa Al Daroua Petroleum Services Company, Al Ghalbi International Engineering & Contracting, Al Haditha Petroleum Services, Al Baraka Oilfield Services 62 ENGINEERING & CONSTRUCTION 63 ARTICLE: Oman builds up as oil prices fall. Engineering and construction firms prepare for lower profit margins and local companies fight to take a bigger share of the market THE OIL & GAS YEAR OMAN The Who s Who of the Global Energy Industry

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6 OMAN 2015 The Oil & Gas Year is audited by BPA Worldwide CONTENTS OMAN The Year s Focus: Development of SLCCs and LCCs Oman s fifth super local community contractor was registered in June The initiative, led by Petroleum Development Oman and the Ministry of Oil and Gas, is steadily directing greater amounts of hydrocarbons wealth to communities living in concession areas. Some companies have welcomed the programme, while others believe it dampens competition. 62 Engineering & Construction Engineering and construction companies in Oman are preparing to operate with lower profit margins as the price of oil remains in a slump. In the first quarter of 2015, the country saw a decrease of 43.3 percent in contract awards. However, project spending will continue, undergirded by the sultanate s robust sovereign wealth fund. In this climate, local companies are continuing a struggle to claim a larger share of the sector s projects. 92 Oilfield Services The Omani government spent $11.5 billion on drilling projects in 2014 in its continuing efforts to keep oil and gas production on a steady rise. This spending has been paralleled by an expansion in the industry s enhanced oil recovery projects, and these two trends mean a constant stream of work both for local and international oilfield services companies that will continue for many years. 65 INTERVIEW: Devaki Khimji, Al Turki Enterprises 66 INTERVIEW: Hans Erlings, Galfar Engineering & Contracting 66 IN PRODUCTION: Oman s natural gas production, COMPANY PROFILE: Petrofac 67 IN FOCUS: Selected Omani projects awarded to Petrofac, COMPANY PROFILE: Powertech Engineering 69 MARKET ANALYSIS: An in-country challenge. Sayyid Mohammed Ali Al Said, VEC Oil & Gas Consultants 70 INTERVIEW: Salim Al Kindy, Tebodin & Partner 71 INVESTOR SPOTLIGHTS: Larsen & Toubro Eletromech, Composite Pipes Industry 72 INTERVIEW: Alex Clark, Special Technical Services 72 RESOURCE: Major Omani infrastructure projects 74 COMPANY PROFILE: TMK GIPI 75 COMMENT: Corrosion costs. A $500-million project to replace pipeline infrastructure 76 VIEWPOINT: Engineer shortage. Ahmed Al Mazrui, Mott MacDonald 76 IN TRAINING: Regional tertiary students enrolled in engineering, manufacturing and construction courses, INTERVIEW: Nasser Al Habsi, Precision Engineering and Consultancy 78 INTERVIEW: Simon Karam, Sarooj Construction Company 79 INVESTOR SPOTLIGHTS: Dohat Al Khaleej, Bin Muqadam Engineering 80 INTERVIEW: Milind Shastri, Oryx Metal Industries 81 COMPANY PROFILE: Mudhaher Establishment 82 INTERVIEW: Abdullah Hassan Al Maqbali, AWS Engineering 83 INTERVIEW: Murtaza Jariwala, Vanguard Engineering & Oilfield Services 83 IN VALUE: Regional construction sector values, FINANCE & LEGAL 85 ARTICLE: Power through low prices. Muscat could diversify the economy with banking sector support 85 IN GROWTH: Oman s GDP, INTERVIEW: H.E. Nasser bin Khamis Al Jashmi, Undersecretary of the Ministry of Finance 87 INTERVIEW: Abdullah Al Jufaili, Sharakah 87 IN RANKING: Rankings of regional countries by quality of credit system, VIEWPOINT: Small and medium change. Raphael Parambi, SME Development Fund 89 INTERVIEW: Abdul Hakeem Omar Al Ojaili, BankDhofar 89 IN RATINGS: Moody's ratings for Gulf governments, INVESTOR SPOTLIGHTS: Vision Insurance, Bank Muscat 90 RESOURCE: Oman s foreign direct investment inflows and outflows, major macroeconomic indicators and Doing Business ranking 91 COMPANY PROFILE: Dentons 92 OILFIELD SERVICES 93 ARTICLE: No oil left behind. Oman s government spent $11.5 billion in 2014 on oil and gas exploration 94 INTERVIEW: Zeinoun Klink, Halliburton 94 IN REVENUE: Halliburton s quarterly revenue, COMMENT: Steamed up. Oman s success with steam injection 96 MARKET ANALYSIS: A solar fuel for oil. Rod MacGregor, GlassPoint 97 MAP: Heavy oil basins 98 INTERVIEW: John Murphy, Nabors Drilling Services 99 INTERVIEW: Mohsin Al Hadhrami, Schlumberger Oman 99 IN RIG COUNT: Monthly rig counts in the Middle East, COMPANY PROFILE: FOS Energy 102 COMPANY PROFILE: Target Oilfield Services 103 INVESTOR SPOTLIGHTS: Gasway, Drilformance 104 INTERVIEW: David Washbrook, Fugro Middle East & Partners 105 COMPANY PROFILE: National Drilling & Services Company 106 INTERVIEW: Hilal Al Busaidi, Gulf Energy 107 INVESTOR SPOTLIGHTS: AIB-Vinçotte International and Partners, National Oilwell Varco 108 COMPANY PROFILE: Compass Oil Services 109 INVESTOR SPOTLIGHTS: Synergy Petroleum International, OHI Petroleum & Energy Services, Weatherford 110 SERVICES & SUPPLIES 111 ARTICLE: A new era for growth. Upgrading industry equipment and standards can help raise production, lower environmental impact and improve safety 112 COMPANY PROFILE: Oilfield Inspection Services 113 INVESTOR SPOTLIGHTS: DNV GL, Bureau Veritas Oman 114 INTERVIEW: Sultan Al Busaidi, UNOS 115 INTERVIEW: Mohammed Barwani, Safety Technical Services 115 IN SAFETY: Injury rate among reporting operators per million hours worked, COMPANY PROFILE: Seven Seas Petroleum 117 COMMENT: A services sector in need of manufacturers. Oman s oilfield services slowed by a lack of local manufacturing THE OIL & GAS YEAR OMAN The Who s Who of the Global Energy Industry

7 THE OIL & GAS YEAR The Who s Who of the Global Energy Industry OMAN Services & Supplies With production shutdowns due to equipment failures and maintenance causing a persistent loss of 50,000-70,000 barrels of oil per day in Oman s oil production, facility and equipment upgrades are sorely needed to ensure a higher and more reliable rate of oil and gas output. Ageing equipment is also placing health, safety and environment standards in the spotlight. The sultanate needs to tackle both issues with the help of inspection services providers. 118 Downstream & Power Generation The drop in oil prices has prompted the Omani government to push to expand the country s downstream and petrochemicals sectors in order to add value to its hydrocarbons products. Investments such as the $3.6-billion Liwa Plastics Project are being made in tandem with support to raise feedstock production from gasfields such as Khazzan and Makarem. 128 Marine & Logistics Oman s location, paired with recent developments in local and regional infrastructure, has positioned the country as a potential logistics centre and gateway for trade between the Middle East, North Africa and Asia. The government is investing in expanding its railway network as well as the ports at Salalah, Duqm and Sohar which is located on the Strait of Hormuz. The country is also developing industrial zones alongside these ports in a bid to secure this role. CONTENTS 5 OMAN INVESTOR SPOTLIGHTS: Alpha Inspection & Engineering Services, ABB 118 DOWNSTREAM & POWER GENERATION 119 ARTICLE: Power through. Oman has made multi-billiondollar investments in its downstream sector to increase the value of its petroleum product exports 120 IN PRODUCTION: Orpic s fuel output by type, COMPANY PROFILE: Orpic 122 PROJECT HIGHLIGHT: Muscat-Sohar Pipeline Project 123 INTERVIEW: Ahmed bin Saleh Al Jahdhami, Oman Power and Water Procurement Company 123 IN POWER: Oman power plant outputs and utilisation, INTERVIEW: Guillaume Baudet, Sohar Power Company 126 PROJECT HIGHLIGHT: Salalah-2 Independent Power Project 126 IN SPENDING: Oman s electricity demand and investments in its power sector, INVESTOR SPOTLIGHTS: ONEIC, Al Batinah Power Company, United Power Company, SMN Power Holding 128 MARINE & LOGISTICS 129 ARTICLE: Centre stage. Oman hopes to expand its role in the regional marine and logistics sector through improved and expanded infrastructure 129 IN SERVICE: Salalah Port statistics, COMPANY PROFILE: Oman Drydock Company 131 INVESTOR SPOTLIGHTS: Verwater Shanfari International, Marine Technology 132 INTERVIEW: Daniel Nordberg, Gulf Agency Company Oman 132 IN LOGISTICS: GCC overall logistics performance index 133 COMMENT: Modern capacity. Oman plans to bolster its logistics and transportation infrastructure to support its goal of becoming a regional trading centre 134 COMPANY PROFILE: Port of Duqm 136 COMPANY PROFILE: Sohar Port and Freezone 137 RESOURCE: GCC Rail Network 138 INTERVIEW: Tarik Mohamed Al Junaidi, Oman Shipping Company 140 EDUCATION & TRAINING 141 ARTICLE: The talent gap widens. Oman faces a severe skill shortage, especially among nationals 142 INTERVIEW: H.E. Rawya Saud Al Busaidi, Minister of Higher Education 144 MARKET ANALYSIS: A public-private balance. Lawrence Alva, National Training Institute 145 INVESTOR SPOTLIGHTS: TATI, Caledonian College of Engineering 146 EXECUTIVE GUIDE 147 ACCOMMODATION 150 EVENTS 151 ACKNOWLEDGMENTS ADVERTISERS INDEX 152 IN BRIEF Publisher: Emmanuelle BerthemetEditor-in-Chief: Gilles Valentin Regional Director: Ioana Marins Country Director: Uğur Özdemir Country Co-ordinator: Anastasia Cariuk Managing Editor: Simon Johns Production Manager: Alex Mazonowicz Chief Sub-Editor: Amanda Towle Deputy Chief Sub-Editor: Suzanne Carlson Web Editor: Angus Foggie Co-ordinating Sub-Editor: Laura Moth Sub-Editors: Leyla Amur, Jessica-Elise Turner Austin, Jessenia Chapman, John Houghton-Brown, James Kiger, Daniel Salinas, Jordan Schultz, Matthew Vance Editorial Intern: Dilara Gülekçi Contributors: Ian Ackerman, Barış Altıntaş, Nick Ashdown, Noah Blaser, Aylin Erman, Jon Hemming, Lewis King, João Marques, Matt Mossman, Helena Oh, Reuben Silverman, Christina St. John, Oliver Tree, Dominic Whiting, David Wilson, Sjoerd Ten Wolde Creative Director: Begüm Alpay Co-ordinating Art Director: Didem Tereyağoğlu Art Directors: Javier González, Hasan Ilkan Cebeci, Ahmet Sağır, Melis Tüzün Circulation & Communication Director: Laura Carr HR: Ece Özmen, Begüm Yurttaş Head of Finance: Hasan Meriç Printing: APA Uniprint Production: The Oil & Gas Year, Ltd. ISBN info@theoilandgasyear.com visit Cover: photograph courtesy of OPAL The Oil & Gas Year is a trading name of The Oil & Gas Year Ltd. Copyright The Oil & Gas Year Ltd All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means electronic, mechanical, photocopied, facsimiled, recorded or otherwise, without the prior permission of The Oil & Gas Year Ltd. The Oil & Gas Year Ltd. has made every effort to ensure that the content of this publication is accurate at the time of printing. However, The Oil & Gas Year Ltd. makes no warranty, representation or undertaking, whether expressed or implied, nor does it assume any legal liability, direct or indirect, or responsibility for the accuracy, completeness or usefulness of any information contained in this publication. Exploring knowledge Extracting intelligence INTERNATIONAL Refining communication The Who s Who of the Global Energy Industry THE OIL & GAS YEAR OMAN 2015

8 THE YEAR IN REVIEW photo courtesy of Sohar Port and Freezone 7 A fine balance H.E. Salim bin Nasser AL AUFI Undersecretary of the Ministry of Oil and Gas 11 Mutual benefits Jonathan WILKS UK Ambassador to Oman 12 The Year in Energy

9 VIEWPOINT H.E. Salim bin Nasser AL AUFI A fine balance Undersecretary of the Ministry of Oil and Gas H.E. Salim bin Nasser Al Aufi describes the challenges still prevalent in Oman s energy industry and outlines how the country s oil production could reach 980,000 barrels per day in The ministry is aiming to create a more efficient hydrocarbons industry by cutting waste and boosting market confidence. The cost of oil production in Oman is still low and major operators are working hard with services providers and other local companies to increase efficiency. All parties are examining the value chain and cutting waste to transform the challenge of low oil prices into an opportunity. This topic was discussed at the Society of Petroleum Engineers conference in March 2015, when the consensus among all the players was that greater collaboration was necessary in order to create trust within the industry. Operators do not have to prescribe everything to their services providers, and should trust them to execute quality work without the need to interfere. A FAIR PRICE: The gap between Oman s cost of production and global oil prices is wide enough for exploration and production companies to make a profit. There may be a few operators that struggle during this oil cycle phase because their output is low. In such cases, operators that are producing small amounts of oil and gas will need to scrutinise their costs, and make cuts accordingly. The profit margins for operators in Oman are realistic and companies are not expected to go bankrupt. There is a reasonable return on their investments, compared to returns seen in many other oil-rich countries. Debates regarding fair oil prices are ongoing. A barrel price of $110 is too high for the consumer, but $50 per barrel of oil is too low for the producer. Shale oil produced in the US initially flooded the market, but now many exploration firms in North America are struggling to turn a profit. For example, producers of Canadian oil sands need oil prices of at least $90 per barrel to break even. The Omani budget was balanced at a much higher oil price than this, and the country has large public expenditures. The Ministry of Oil and Gas has made it clear that if the price of oil drops below the cost of production, we will behave similarly to other businesses by purposefully reducing our activities. READY TO PRODUCE: Global energy consumption is increasing annually due to a rising population and rapid industrialisation in some regions of the world. Oil and gas have been oversupplied at times in history, and the Oman has the potential to produce 1 million bopd [if ] it does not continue to experience frequent unscheduled deferments of 50,000-70,000 bopd. price of hydrocarbons was self-corrected by the market. This is what is currently taking place. The Ministry of Oil and Gas has already clarified that it will continue to invest in Oman s energy industry, but will be more cautious with investment decisions. Operators prefer to keep investing in Oman because drilling operations pay off in six months, on average. Small and medium-sized projects, whether for conventional or secondary recovery, will most likely reimburse the operators initial investments within three years. Rabab Harweel, an enhanced oil recovery project led by majority state-owned Petroleum Development Oman, was launched when oil prices were high and is now profitable. By February 2015, it had recovered the initial investment, so the only cost is the cost of operation. If the oil and gas industry ceases investment when crude supply is high, the world will encounter a fuel shortage within a few years. Fortunately, the majority of upstream companies in Oman have the will and capabilities to help the ministry in increasing the country s output to 980,000 barrels of oil per day (bopd). For example, local company CC Energy Development Oman ended 2014 having extracted 30,000 bopd. State-owned Oman Oil Company Exploration & Production did not produce oil in 2014, but its output in 2015 has already grown quickly to reach around 6,000 bopd. Oman has the potential to produce 1 million bopd as long as it does not continue to experience frequent unscheduled deferments of 50,000-70,000 bopd. More needs to be accomplished in regards to asset management and preventative maintenance to avoid failure of equipment, pumps, compressors, pipelines and wells. OFFSHORE ENCOURAGEMENT: Norway s DNO and US company PetroTel are both present in offshore blocks north of the country. In April 2015, block 41 was relinquished by Total as the company could not justify continuing operations after studying the block in depth. The ministry is reviewing the marketing strategy for open blocks where historical exploration activities were not successful. This could include executing data-gathering programmes before pushing blocks back on the market. THE YEAR IN REVIEW 7 VIEWPOINT The Who s Who of the Global Energy Industry THE OIL & GAS YEAR OMAN 2015

10 THE YEAR S AWARDS OMAN 2015 MAN OF THE YEAR Raoul RESTUCCI THE YEAR IN REVIEW THE YEAR S AWARDS OMAN The Sohar Refinery Improvement Project is underway. In May 2014, state-owned Oman Oil Refineries and Petroleum Industries Company secured $2.8 billion in financing for the structure s modernisation. The project will increase the refinery s capacity from 116,000 barrels of oil per day to at least 180,000 barrels of oil per day and improve the Oman Export Blend, ensuring that it meets Euro 4 standards. The UK s Petrofac and South Korea s Daelim have been awarded $2.1 billion for engineering, procurement and construction works for the project, which will come on line in CONTRACTOR OF THE YEAR Following his 2010 appointment to Petroleum Development Oman (PDO), managing director Raoul Restucci used his expertise to transform the company into an innovative upstream firm specialising in unconventional hydrocarbons extraction. In 2014, the executive was named one of the 10 most influential people in the Middle Eastern hydrocarbons industry by Arabian Industry, an online Gulf-centric publication. Restucci has played a key role in localising Oman s hydrocarbons workforce, promoting the in-country value initiative. At the helm of Petroleum Development Oman, Restucci has overseen the creation of super local community contractors that develop competitive Omani oilfield services companies. PROJECT OF THE YEAR Founded in 1972, Galfar Engineering & Contracting (GEC) is Oman s largest local engineering and contracting firm with ongoing endeavours valued at $1.75 billion. The firm specialises in hydrocarbons and civil construction projects. In July 2014, PDO announced that the company s $100-million GEC north Oman service contract had been extended from August 2014 to August Contracts won since 2014 include a $56-million deal to clear a site for the Duqm Refinery and a $110-million agreement to construct a gas gathering system for the Khazzan Gas Project. Intaj is the 100-percent Omani-owned new operator in the nation s hydrocarbons market. In November 2014, the Ministry of Oil and Gas awarded 5,808-square-kilometre block 56 to a joint venture composed of Indonesian energy firm MedcoEnerji (75 percent) and locally owned Intaj (25 percent). The play s first well is expected to be drilled no later than The services arm of Intaj has been involved in surface, downhole service and manufacturing activities. The local company is also planning to expand its footprint into the coiled tubing business. LOCAL COMPANY OF THE YEAR NEWCOMER OF THE YEAR Established in 2011, Al Sahari Oil Services (SOSCO) is the second super local community contractor, or SLCC, working in the southern concession area. In May 2013, the company began work on a $110-million well intervention services contract awarded by PDO. SOSCO has 217 employees and a 93-percent Omanisation rate. The firm manages 52 local companies; 12 of which are participating in PDO projects. SOSCO s commitment to searching for and implementing new technology has helped the company to triple in value since entering the Omani market. TRAINING PROVIDER OF THE YEAR National Training Institute (NTI) became a part of UK s Babcock International Group in The institute specialises in a number of disciplines such as technical training, business skills and IT. In Oman, NTI is training locals to become top-end hydrocarbons technicians for upcoming projects, such as the Khazzan Project. NTI, the government and industry operators are developing a local workforce through the Omanisation programme. NTI s technician training centre in Ghala is currently preparing Omani locals for work on the Khazzan Project. THE OIL & GAS YEAR OMAN 2015 The Who s Who of the Global Energy Industry

11 OMAN AT A GLANCE KINGDOM OF BAHRAIN MANAMA STATE OF QATAR DOHA ARABIAN GULF Dubai Strait of Hormuz Musandam (Sultanate of Oman) Madha (Sultanate of Oman) ISLAMIC REPUBLIC OF IRAN ISLAMIC REPUBLIC OF PAKISTAN ABU DHABI UNITED ARAB EMIRATES Ibri Sohar Port Sohar Barka Bahla Nizwa GULF OF OMAN Juzor Ad Dimaniyyat MUSCAT As Sultan Qaboos Port Qalhat Sur THE YEAR IN REVIEW KINGDOM OF SAUDI ARABIA SULTANATE OF OMAN Duqm Duqm Port Masirah 9 OMAN AT A GLANCE National capital REPUBLIC OF YEMEN Raysut Salalah Salalah Port Juzor Al Hallaniyyat ARABIAN SEA Kilometres City Town or other settlement Major airport Harbour National boundary Coast line 2015 The Oil & Gas Year Ltd., The Oil & Gas Year Oman All rights reserved. POLITICS ECONOMY Official name: Sultanate of Oman Political system: monarchy Head of state: H.M. Sultan Qaboos bin Said Al Said Population: 4.16 million (2.35 million Omanis and 1.81 million expatriates) Population growth rate: 2.07 percent GEOGRAPHY Area: 309,500 square kilometres Capital city: Muscat Natural resources: oil and gas, copper, asbestos, marble and limestone Major languages: Arabic and English Currency: rial (OMR1:$2.5884) GDP: $77.8 billion (2014) Major trading partners: China, Japan, UAE, South Korea and India Labour force: 968,800 Fiscal year: calendar year ENERGY Oil production: 943,000 barrels per day (2014) Natural gas production: 35.7 bcm (1.26 tcf) (2014) Reserves: 5.2 billion barrels (end-2014) Sources: CIA World Factbook, NCSI, IMF, Ministry of Oil and Gas The Who s Who of the Global Energy Industry THE OIL & GAS YEAR OMAN 2015

12 THE INVESTORS INDEX The Oman 2015 Investors Index THE YEAR IN REVIEW THE INVESTORS INDEX A rating of 69.1 in 2015 compared to the 91.1 recorded by TOGY in 2014 highlights some of the challenges that go hand in hand with a significant drop in global oil prices. While the Ministry of Oil and Gas conveyed that the government would continue funding the industry, services providers are concerned about the lack of projects and contracts. The Oman Society for Petroleum Services, a non-profit organisation aiming to increase local participation and the industry s Omanisation rate, has reassured domestic services providers that they will receive work equivalent to at least 10 percent of the value of projects. MORE FDI: Oman is among the safest and most stable countries. This is reflected by the almost 90 percent of oil and gas executives who rated the political and economic stability of the domestic hydrocarbons industry as either highly stable or stable. This atmosphere has attracted major oil companies such as BP, Shell, Occidental Petroleum and the China National Petroleum Corporation. Nonetheless, challenges remain and this is underlined by the almost 55 percent of participants claiming that starting an oil and gas business in the sultanate is difficult. However, while 60.6 percent of the CEOs interviewed felt that Oman s hydrocarbons industry is either very transparent or transparent, 39.4 percent of executives said the industry was not transparent. Oman has been gripped by a string of graft cases involving some of the senior personnel of national oil companies and several of the country s largest services providers. The government responded to the crisis by handing long sentences to those convicted and tightening regulatory measures to prevent such incidents from reoccurring. PRO-BUSINESS, BUT RESTRICTIVE: Around 66.7 percent of interviewees described government policies as pro-business, but restrictive. Both suppliers and producers have complained about the bureaucracy in the industry. Raoul Restucci, managing director of majority-nationalised Petroleum Development Oman, and Ministry of Oil and Gas Undersecretary H.E. Salim bin Nasser Al Aufi have BY MARKET Abu Dhabi (2015) Kuwait (2014) Iraq (2014) Saudi Arabia (2014) Qatar (2014) Oman (2015) 69.1 both called for greater co-operation between hydrocarbons extractors and domestic services providers, especially as oil prices are unlikely to rebound to above $100 per barrel in ABOUT THE INDEX: The TOGY Investors Index is designed to measure confidence among oil and gas investors as expressed in their level of spending in any given market. The index is a figure based on the response of 33 oil and gas executives in the Omani market. The survey consists of five questions in which participants are asked to provide positive or negative responses. A reading above 50 percent on the index represents a positive perception among oil and gas industry investors, while a reading below 50 indicates a more pessimistic outlook IN RESPONSE How would you describe the policies of this government vis-àvis the oil and gas industry? Pro-business 18.2% Pro-business, but restrictive 66.7% Anti-business, but accommodating 12.1% Anti-business 3.03% How would you rate the ease of starting an oil and gas business in this market? How would you rate the ease of doing business in this country? Very easy 6.06 % Easy 30.3% Difficult 54.6% Extremely difficult 9.09 % Extremely Very easy difficult 6.06 % 9.09% Easy 30.3% How would you rate the level of transparency in this oil and gas market? Very transparent 12.1 % Transparent 48.5 % Not transparent 39.4% Corrupt 0% How would you rate the level of political and economic stability in this oil and gas market? Very easy 6.06 % Easy 42.4 % Difficult 42.4 % Extremely difficult 9.09 % Source: Survey conducted by The Oil & Gas Year in Oman between January 2015 and May 2015 THE OIL & GAS YEAR OMAN 2015 Difficult 54.6% Highly stable 18.2% Stable 69.7% Unstable 9.09% Highly unstable 3.03% The Who s Who of the Global Energy Industry

13 INTERVIEW Mutual benefits The UK is Oman s biggest foreign investor and one of its top trading partners, with exports of UK goods to Oman doubling between 2007 and Jonathan Wilks, UK ambassador to Oman, talks to TOGY about the business opportunities available for UK companies in the sultanate and the will to increase collaboration already established between the two nations. Why do UK-headquartered companies view Oman as an attractive place to do business? It is an exciting and dynamic market that many corporations are competing to invest in. It is perceived as a stable country with an incredible vision for the development of its infrastructure and its oil and gas industry. UK companies also have a historical presence in Oman, understand how the country is changing and want to play a part in its continued development. The government of Oman is facing a period of low oil prices but the Ministry of Oil and Gas is taking the necessary steps to increase the industry s profitability. The challenges are being discussed with honesty. The government is also conscious of the need to diversify the hydrocarbons-dependent economy, and the necessity of creating a highly skilled local workforce. The energy industry in the country is still dominant compared with other industries such as finance and retail, and UK companies can help strengthen non-oil and gas sectors by entering the market. The UK embassy helped about 500 UK companies doing business in Oman in It did this by providing in-country expertise and business guides, sign posting to relevant local partners, facilitating meetings, arranging visit programmes and providing networking opportunities. There are also 10 FTSE 100 companies that have an active presence in the sultanate. How are UK companies helping to develop sectors in Oman s energy industry? BP Oman, the super-major s local subsidiary, has a 60-percent stake in block 61 and will help the country gain expertise in the production of tight gas. The state-owned Oman Oil Company Exploration & Production has a 40-percent interest as a non-operator and will be involved in the block s Khazzan tight gas project. This will lead to the transfer of technology from the international operator to the national oil company. Shell s in-country subsidiary, Shell Development Oman (SDO), is a 34-percent shareholder in Petroleum Development Oman. The company is assisting the majority-nationalised operator in increasing its output at block 6. SDO has been able to add value to Petroleum Development Oman through both innovation and training. Foreign companies entering the market need to commit to creating jobs for Omanis. Both SDO and BP Oman train Omanis to be capable of executing complex oil and gas projects. BP Oman signed a memorandum of understanding to build a greenfield acetic acid plant at the Port of Duqm special economic zone. UK company Babcock International, which recently acquired the National Training Institute, is playing a significant role in vocational oil and gas training. The company is training 100 Omanis to become technicians for BP Oman. Can these benefits be seen in the economy beyond the oil and gas industry? Enhancements in the oil and gas industry must have a knock-on effect on the wider economy. Shell s Intilaaqah programme, for instance, aims to increase entrepreneurship among Omanis, and to shift the economy away from oil and gas. Areas of the economy such as downstream, tourism, fisheries and minerals should all benefit and mature with the help of the revenues accumulated from the upstream sector. Overall, I want the UK to be a leading partner in Oman s broader economic development by offering technical advice, sharing experience and investment. Although there is a strong UK- Omani relationship, over the past 44 years the sultanate has strengthened ties with China, India, Brazil, European nations and the US. I want the UK to be active and to play a leading role in Oman, and we are happy to compete for that. Competition benefits Oman. Does the Omanisation initiative deter foreign companies from investing in the sultanate? The Omanisation initiative is absolutely essential for the future of the country, its stability and prosperity. However, the quotas are to an extent a burden on private investors. There are two major issues: Some private enterprises are hiring expatriates when they should be focusing more on recruiting from the local pool of talent, and Omanis must reduce their job and salary expectations. Omanis increasingly understand that they will have to take opportunities available to them in a diversified economy. The government cannot provide public-sector jobs to everybody. Jonathan WILKS UK Ambassador to Oman Some private enterprises are hiring expatriates when they should be focusing more on recruiting from the local pool of talent, and Omanis must reduce their job and salary expectations. IN FIGURES Value of UK exports to Oman in million Value of UK imports from Oman in million THE YEAR IN REVIEW 11 INTERVIEW The Who s Who of the Global Energy Industry THE OIL & GAS YEAR OMAN 2015

14 THE YEAR IN ENERGY THE YEAR IN REVIEW THE YEAR IN ENERGY US company GlassPoint receives $53 million from Oman's State General Reserve Fund, Shell and existing partners for solar steam generators to reduce natural gas consumption at oilfields by up to 80 percent. 27 Petroleum Development Oman (PDO) is asked to raise production from a peak capacity of 550,000 to 600,000 to reach a nationwide target of 950,000 barrels of oil per day in BP Oman awards two major contracts for the Khazzan Project: a $400- million contract to KCA Deutag for the construction and operation of five newbuild onshore rigs and $330 million to Abraj Energy Service to supply three drilling rigs. 09 H.E. Ahmed bin Saleh Al Maimani, undersecretary at the Ministry of Commerce and Industry, calls for an increase in offshore production during the Offshore Development Oman conference Ministry of Oil and Gas Undersecretary H.E. Salim bin Nasser Al Aufi announces that Oman s production target for 2015 will rise to 980,000 barrels per day and requests that oil producers review their operation costs in light of falling oil prices. 20 Omani oil minister H.E. Mohammed Al Ruhmy expresses his frustration with the OPEC production ceiling of 30 million barrels of oil per day, arguing that it is harming GCC countries and creating volatility in oil prices. AUG SEP OCT NOV DEC JAN 05 Oman s Ministry of Oil and Gas invites hydrocarbons companies for a new bidding round on five oil and gas blocks. Acreages include offshore blocks 18, 59 and onshore blocks 43A, 54 and Oman Oil Company signs a $1.85-billion two-part loan agreement for general business purposes with more than 15 banks. 19 Chevron Exploration and Production Netherlands entered a share-sale agreement with Petrogas E&P, part of MB Holding group, for its 11 North Sea offshore blocks. 29 PDO awards an engineering, procurement and construction contract to the Spanish joint venture of OHL Industrial and engineering group SENER for the modernisation of the Saih Nihayda Gas Plant and the Saih Rawl Central Processing Plant. 16 Joint venture Oman Oil Refineries and Petroleum Industries Logistics signs an engineering, procurement and construction and financing agreement for the $320-million Muscat- Sohar Pipeline Project. 17 The commencement of commercial tight gas and condensates exports from block 60 is announced by Oman Oil Company Exploration & Production. 19 Oman Oil Company Exploration & Production opens $1.3-billion tight gas processing plant at the Abu Tubul field. 28 The Ministry of Finance gives Oman Oil Refineries and Petroleum Industries Company preliminary approval for an initial public offering by 2018 following the completion of the $3.6- billion Liwa plastics plant at Sohar. THE OIL & GAS YEAR OMAN 2015 The Who s Who of the Global Energy Industry

15 THE YEAR IN ENERGY 12 The Supreme Court overturns the 23-year prison sentence handed down to former CEO of Oman Oil Company Ahmed Al Wahaibi for accepting bribes, abuse of office and money laundering. 09 Irish exploration and production firm Circle Oil announces that it will quit the onshore Shisr-1 well in block 49 following drilling difficulties. 13 Total quits deepwater block 41 after failing to find commercial reserves. 21 The Shahd oilfield enters the production stage, increasing oil output in the CC Energy Development-operated blocks 3 and 4, which averaged 30,000 barrels of oil per day in March. 07 Dave Campbell, BP Oman chief operating officer, announces that the company expects to drill 16 wells in the Khazzan tight gas field and have nine rigs active at the development by the close of Petrofac is awarded a $900-million engineering and procurement contract by PDO to develop the Yibal Khuff gasfield. 30 Oman Trading International says it will invest in facilities to store fuel in Mozambique, Tanzania or Kenya to supply markets in Africa s interior. 08 GlassPoint reveals plans to build the $600- million Miraah plant, which will produce steam for injection at the Amal West field THE YEAR IN REVIEW 13 THE YEAR IN ENERGY FEB MAR APR MAY JUN JUL 09 Yusuf Al Ojaili is appointed head of country and president by BP Oman. 16 Oman s first downstream summit, Oman Refining and Petrochemicals Exhibition and Conference, is launched to highlight opportunities in the petrochemicals sector. 09 Oman and Indonesia plan to create a joint business council by 2016 to facilitate bilateral trade between the two countries, which will result in more investment in the nations oil and gas industry. 15 Oman Oil Company Exploration & Production announced plans to drill two exploration wells in the east of the country at the Sharqiya structure. 11 Petrogas Kahil, the Omani subsidiary of Petrogas E&P, announces that it will invest $40 million in exploring onshore block 55 in southeastern Oman. 14 UK construction company Carillion s Omani joint venture will build accommodation for BP s Khazzan tight gas project. The contract is worth around $125 million. 23 Oman Power and Water Procurement awards Mitsui & Co, ACWA Power and Dhofar International Development and Investment Holding a contract to develop the $620-million, 445-MW, natural gas-fired, combined-cycle Salalah- 2 power plant. 29 Indonesia s Energy Minister Sudirman Said confirms Omani investment of $7 billion to develop the nation s downstream sector including a petrochemicals plant, refinery and oil storage facilities. 30 Oman and Iran hold talks on building a pipeline between Iran s Rudan and the Port of Sohar. The countries have a $60- million agreement for the supply of 28 mcm (989 mcf) per day of Iranian gas to Oman. The Who s Who of the Global Energy Industry THE OIL & GAS YEAR OMAN 2015

16 DIPLOMACY & POLITICS 15 The power of pragmatism 16 Live and learn Musallam AL MANDHARI Acting CEO OMAN SOCIETY FOR PETROLEUM SERVICES 17 Seoul position KIM Daesik South Korean Ambassador to Oman

17 ARTICLE The power of pragmatism Oman pursues a quiet brand of diplomacy. The country has carved out a calm niche in an increasingly loud neighbourhood, and its positive relations with Iran have yielded a large-scale gas supply deal. Further abroad, Oman maintains mutually beneficial economic and diplomatic ties with the likes of the US, the UK and China and has new trade openings with Indonesia. Oman projects a voice for calm and stability in a tumultuous region. Its diplomatic initiatives evince an independent and pragmatic foreign policy. Recently, the sultanate has taken a neutral approach to the 2015 conflict in neighbouring Yemen, for instance. It is the only GCC member country that declined to join the Saudi Arabia-led military campaign against the Houthi rebels. H.M. Sultan Qaboos bin Said Al Said s return to Oman after eight months of medical treatment in Germany in March 2015 boosted market confidence and quietened speculations about a post-qaboos era. The monarch has played a pivotal role in Oman s development since taking power in As Oman pursues a pragmatic foreign policy, it is maintaining and growing trade ties with a diverse array of countries, including Iran, the US, Indonesia and Saudi Arabia. THE IRAN EDGE: Oman maintains close diplomatic ties with Iran, its neighbour to the north. With its relations with the West and membership in the GCC, the sultanate is able to act as a bridge between Iran and regional and international administrations. In November 2014, Muscat hosted nuclear talks between Iran and the US, which laid the groundwork for ongoing negotiations on a nuclear deal. Iran and Oman are planning a 200-kilometre, $1-billion subsea gas pipeline from the province of Hormozgan to Sohar. An Iranian consultant has been selected to conduct feasibility studies for the project, which will be the first-ever hydrocarbons pipeline between Iran and a GCC country. In March 2014, the two governments reached a 25-year gas supply agreement valued at $60 billion. Under the deal, total of 10 bcm (353 bcf) of gas per year will flow from Iran to the sultanate. IN THE GCC, OUT OF OPEC: With average oil production in 2014 at 943,000 barrels of oil per day, Oman is the most prolific Middle Eastern producer that is not a member of OPEC. As expected, the slide in global oil prices has dealt a blow to the country s finances. Oman derives 83 percent of its income from the oil and gas industry, and because of the price drop, it has predicted a budget shortfall of OR1.5 billion ($3.88 billion) for OPEC s lack of will to address the price slump has prompted criticism from Omani officials. At a conference in early 2015, Minister of Oil and Gas H.E. Mohammad bin Hamad Al Rumhy said the cartel had put its market share before revenue. At a June 2015 meeting, OPEC elected to keep its production ceiling at 30 million barrels of oil per day, signalling its intention to let the low price stand. BRANCH OUT: With lower oil revenue expected for the medium term, Oman s drive to diversify its economy, which is already underway, has taken on a new sense of urgency. The government has been working to establish Oman as a logistics hub. In early 2015, throughput at the Port of Salalah rose to an average of 1 million tonnes per month, an increase over 2014 s 860,000 tonnes per month. The country s new deepwater port at Duqm will also contribute to Oman s logistics capacity. With these facilities taking on more industrial cargo, the port of Muscat will be freed up to support government efforts to boost tourism. TRADE TIES: Most of Oman s exports are crude oil or hydrocarbons products. The country s top export destinations are in Asia, with China leading the pack, followed by Japan and South Korea. The UK contributes about one-third of all foreign direct investment in Oman, making it the largest source of investment from abroad. The US is another important trading partner for Oman. Since 2009, a free-trade agreement has been in effect. Oman s exports to the US were around $1 billion in 2013, and $1.5 billion went from the US to Oman. Indonesia is emerging as an important trade partner for Oman. Trade between the two countries was valued at around $438 million in 2014, a 2.9- percent increase over By the end of 2015, Oman and Indonesia plan to set up a joint business council to facilitate trade between the countries. With attention to diversifying its economy and increasing trade, supported by a pragmatic foreign policy, Oman is positioning itself to circumvent the economic and political storms its neighbours face. FIGURES IN MARCH 2014, OMAN AND IRAN AGREED ON A $60-billion GAS SUPPLY DEAL IN A PLANNED SUBSEA PIPELINE WILL TRANSPORT 10 bcm OF GAS PER YEAR FROM IRAN TO THE SULTANATE TRADE BETWEEN OMAN AND INDONESIA ROSE TO $438 million IN 2014 DIPLOMACY & POLITICS 15 ARTICLE The Who s Who of the Global Energy Industry THE OIL & GAS YEAR OMAN 2015

18 INTERVIEW DIPLOMACY & POLITICS INTERVIEW 16 Musallam AL MANDHARI Acting CEO OPAL About OPAL OPAL plays a direct role in training Omani nationals for the future employment in the oil and gas industry. The institution works closely with the Ministry of Oil and Gas, the Ministry of Manpower and private enterprises to ensure that nationals benefit from the oil and gas industry. The organisation also focuses on the Omanisation and the health, safety and environment compliance record of oil and gas companies operating in Oman. Live and learn The role of Oman Society for Petroleum Services (OPAL) is to help members share best practices. OPAL s acting CEO, Musallam Al Mandhari, talks to TOGY about government initiatives that assist communities affected by oil and gas operations, as well as the challenges faced by companies attempting to increase local content. What role are in-country value initiatives playing in Oman s oil and gas industry? In-country value initiatives were implemented to generate jobs and ensure a sustainable increase of domestic spending on projects. The Ministry of Oil and Gas created a pathway so that in-country value will be taken seriously by operators, producers and contractors, which are expected to provide contracts to local services companies and create opportunities to develop local manufacturing expertise. Companies in the upstream sector are working to identify areas that can be further localised. Greater collaboration is needed between OPAL and the Ministry of Manpower to identify which positions can be Omanised. What can companies do differently to meet the required Omanisation rate? Greater collaboration is needed between OPAL and the Ministry of Manpower to identify which positions can be Omanised in the oil and gas industry. Vocational training courses can then be developed to train and churn out Omani workers for positions that are in demand. Some international firms such as Shell Development Oman contribute large funds as part of their corporate social responsibility to train Omanis. A compulsory training levy based on profits would be a better option to ensure a sustainable availability of funds as well as to intensify the training of the local workforce. To what extent is PDO s scheme to create super local community contractors (SLCCs) an answer to developing Omani companies? The concept of SLCCs is only one of the policies the government supported to assist local communities living in concession areas. This initiative has functioned very well and we are beginning to see the benefits. It has provided jobs for citizens living near oil and gas fields. The government is contributing to the development of small and medium-sized enterprises by providing startups with loans via the Al Rafd Fund at preferable rates. Some regulations will be forthcoming to make available at least 10 percent of contract value in government tenders for such businesses. Will low crude prices slow down projects? Low oil prices are not a new phenomenon, particularly in the Middle East. Based on past cycles of price fluctuation, this is just another wave that oil and gas companies and the government will have to ride out. Projects that have yet to begin might be postponed, and ongoing ones will either be put on hold or reduced in scope. Companies in the oil and gas industry are already familiar with the challenges that are brought on by low oil prices. Some projections during the 1980s and 1990s, an era of low crude oil prices, suggested that crude would be as low as $10 per barrel. The price of oil has stabilised far above that level and should rise gradually. IN 35,000 30,000 25,000 20,000 15,000 10,000 5,000 EMPLOYMENT Projected 2020 demand for employees in selected sectors of the oil and gas industry 0 Exploration Construction and production companies Services providers Manufacturing Source: Oman Society for Petroleum Services THE OIL & GAS YEAR OMAN 2015 The Who s Who of the Global Energy Industry

19 MARKET ANALYSIS Seoul position Oman and South Korea celebrated 40 years of diplomatic relations in Cooperation between the two countries is mainly energy-related, as South Korea imports both oil and gas from the sultanate. An agreement was reached in January 2015 to extend the supply of hydrocarbons from the Gulf nation to its partner. Since the launch of diplomatic relations between Oman and South Korea, ties between the two countries have been strengthened by the need for energy co-operation. South Korea relies on imports to meet 97 percent of its energy needs. Oman is a crucial partner, accounting for 13 percent of South Korea s LNG imports. It also contributes 2 percent of South Korea s oil imports. This trade is based on a 25-year purchase agreement that came into effect in To South Korean Ambassador to Oman Kim Daesik, the fall in oil prices will not alter his country s will to trade on a longterm basis. When there is some turbulence in oil and gas markets, long-term contracts are still considered as a much better option to access stable production of LNG, he said. DURABLE RELATIONS: South Korea would like to increase the share of its hydrocarbons imports from Oman when production increases, Kim told TOGY. Oman s Ministry of Oil and Gas and upstream companies have intensified the search for new finds both onshore and offshore. The Khazzan tight gas project aims to raise the country s daily production by 28.3 mcm (1 bcf) of gas and 25,000 barrels of gas condensate from 2017 onwards. The project is expected to make up 30 percent of Oman s gas supply by 2020, ultimately boosting its export potential to partners such as South Korea and China. LAND OF OPPORTUNITY: Beyond Oman s security and stability, recent developments have made the country a more attractive destination for foreign investment. The creation of special economic zones in Duqm, Sohar and Salalah has incentivised foreign companies to enter the market. South Korean companies such as Hyundai Engineering, Daewoo Shipbuilding and Marine Engineering, and LG International have expanded their presence in the country by entering joint ventures with state enterprises such as the Oman Oil Company. Hyundai Engineering and Construction was awarded a $480-million contract for the engineering, procurement and construction of the Musandam Gas Plant in December The plant is expected to be commissioned in the third quarter of In the Port of Duqm, Daewoo Shipbuilding and Marine Engineering has participated in building and managing a $1.5-billion shipyard. Meanwhile, South Korea s LG International has agreed on a joint-venture deal with Oman Oil Company to develop an industrial chemicals project at the Port of Sohar. The companies will produce 1.1 million tonnes of purified terephthalic acid and 500,000 tonnes of polyethylene terephthalate per year. The $850-million project is expected to come on line by the end of In addition to petrochemicals projects, Oman s national railway development is an area where South Korea is primed to contribute. South Korea s petrochemicals and railway sectors are extremely advanced. Related co-operation between the two countries is likely to materialise, Kim said. As Oman plans to continue long-term hydrocarbons projects across the value chain in spite of the global oil price slump, South Korean companies are poised to support. IN TRADE Oman s crude oil exports by destination, 2014 (million barrels) Others 4.56 India 4.9 China 211 Japan 13.8 South Korea 6.08 Singapore 3.34 Thailand 15.1 Taiwan 33.9 Source: National Centre for Statistics and Information When there is some turbulence in oil and gas markets, long-term contracts are still considered as a much better option to access stable production of LNG. KIM Daesik South Korean Ambassador to Oman DIPLOMACY & POLITICS 17 MARKET ANALYSIS The Who s Who of the Global Energy Industry THE OIL & GAS YEAR OMAN 2015