Research Handbooks in Business and Management series
Edited by Léo-Paul Dana, Mary Han, Vanessa Ratten and Isabell M. Welpe
Chapter 25: Oman
Yochanan Shachmurove 1 Introduction Although Oman is not as rich in oil as some of its Arabic neighbors, oil production has been a major component of Oman’s gross domestic product (GDP) since commercial export of oil began in 1967. During the 1980s and 1990s, the Omani economy was highly susceptible to fluctuating oil prices. In response to diminishing oil reserves, the Omani government has taken serious measures to enhance its natural gas resource facilities and related businesses, as well as to expand non-oil and non-energy related industries such as light manufacturing, agriculture, fisheries, and tourism. The current stable period of growth in Oman is being driven by strong oil prices, increasing volumes of liquefied natural gas (LNG) sales and investments in downstream industries like power, telecoms and tourism.1 Real GDP growth is estimated to have reached 6.6 percent in 2006 due to strong growth in LNG production and domestic spending increases from high oil revenue, although crude oil output eased in 2006 and is expected to continue to fall over 2007 and 2008 because of the effects of enhanced oil recovery projects, which are unlikely to be fully felt before 2010.2 Recently, Oman invited international oil firms to sign production sharing deals early next year as part of a US$10 billion plan to boost oil output to 1 million barrels per day, up from the current 770 000 barrels (hydrocarbons account for 40 percent of Omani revenues).3 High oil prices and strong LNG exports are likely to offset...
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