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COUNTRY NAME: Sultanate of Oman
LAND AREA: 212,000 km2
POPULATION: 2,9 million (2010 est.)
LANGUAGE: Arabic (official), English
CURRENCY: 1 Omani Rial (OMR) = 1.000 Baisa; 1 EUR = 0.52 OMR (Nov. 2010)
MAIN CITIES: Muscat (capital), Suhar, Sur, Salala, Ar-Rustaq
NATIONAL DAY: 18 November – Birthday of Sultan Qaboos
TIME ZONE: Standard Time is GMT + 4
The Sultanate of Oman is strategically located at the south-eastern corner of the Arabian Peninsula, the junction of the world’s two large continents: Asia and Africa and on the trade route between Europe, Asia and the Far East. His Majesty Sultan Qaboos bin Said is the Head of State of the country. His accession in July 1970 ushered in the new era and modern age for Oman. The Sultanate enjoys a stable social, political, and economic system with excellent relations with neighbouring countries. All this enabled the country to play an active role in promoting regional political and economic cooperation. In addition to its rich cultural heritage it has a safe environment, friendly people and abundant scenic beauty and variety. Oman offers a lot to attract tourists and business visitors alike.
Market-oriented policies and private sector development are deeply rooted economic concepts and practices in Oman. The government has always regarded a dynamic private sector as the engine of prosperity and growth. This is clearly reflected in Oman’s Development Strategy, which was adopted back in 1974. One of the salient features of this strategy was to establish a free competitive market economy with equal opportunities for all. Through consecutive Five-Year development plans, Oman has achieved remarkable progress on both the economic and social fronts in a relatively short period of time. Nevertheless, after three decades of intensive development efforts, Oman still faces a host of challenges stemming mainly from the fact that the economy is relying on oil which is a non-renewable dwindling resource subject to a high degree of price volatility. Recognizing this challenge, the government has initiated a structural adjustment process aimed at laying a solid foundation for a diversified economy led by the private sector. Entailed amending laws and regulations such as Foreign Investment Law, labour law, and others including the Commercial Law, the Agency Law, the Copyright Law, and the Corporate Income Tax Law, which are pursuing the provisions of the Basic Law of the State proclaimed the supremacy of law as the basis for governance and guaranteed equal opportunities and freedom for all. These reform measures paved the way towards improving the economy’s potential and its ability to break away from its dependency on oil and to diversify the sources of national income. To this end, a number of huge projects have been completed or are underway in the current Seventh Five-Year Development Plan. These are the positive steps in Oman’s way to realize its Future Vision, and outline the major policies and mechanisms through which the country will achieve sustainable development in a private sector-led and an export-oriented economy with diversified sources of national income. With the objective of integrating into the international economy, Oman joined World Trade Organization in November 2000 and became a full- fledged member. Oman as a founding member of GCC, is now part of the GCC Common Market and also playing an active role in the Greater Arab Free Trade Area of the Arab League. With the successful completion of the Sixth Five-Year Development Plan (2001-2005) and the satisfactory progress realized in the Seventh Plan (2006-2010). Oman has confidence and a robust outlook for future.
Economic Outlook
For 2009, Oman has announced a US$16.7 billion budget. The budget proposes to be flexible as it may entail adjustments if the average oil price falls below US$45 per barrel. Revenues are forecast to be US$14.6 billion, based on the assumption of an average oil price of US$45 per barrel and production of 805,000 barrels per day. An increase of US$1.6 billion in expenditure represents an 11 per cent growth from the previous year. The development budget allocation of US$2.1 billion, showing an increase of 10 per cent over the previous year, will cover ongoing as well as new development projects listed in the Seventh Five Year Plan (2006-2010). Additional allocations have been made for the road sector, ports and airports to spur the growth of the economy. Oman’s tax rate is now the lowest in the region, according to the Royal Decree No. 28/2009 issued in June 2009. The new uniform of tax rate removes the disparity in tax rates between foreign and local companies, and reduce the tax rate to 12 per cent for all companies with an initial tax free exemption of RO30,000.
Power & Water
The state-owned Oman Power and Water Procurement Company (OPWP) aims to boost power generation capacity in the Sultanate by around 3,200 MW through the development of four new Independent Water and Power Projects (IWPPs). The privately financed projects — planned at Barka/Sohar, Duqm, Ghubrah and Salalahare targeted to be brought into commercial operation over the 2010-2015 timeframe. The single largest among these is an IWPP proposed to be established either in Barka or Sohar. It will have a generation capacity of 1,300 MW and a water desalination component of 55,000 cubic metres per day. Omani government planned to complete the privatization of the Main Interconnected Transmission System, which serves the north of Oman, by the fi rst quarter of 2010. The authorities are also considering the privatisation of the three state-owned power distribution and supply companies in the future. Oman Wastewater Services Company (OWSC) has signed two contracts worth over US$375 million, covering the development of two key components of the Seeb Wastewater project.
Oil & Gas
Oman has signed a concession agreement with Occidental Oman Gas Company, a subsidiary of energy major Occidental Petroleum, covering the exploration and development of potential gas reserves in Block 62 (Habibah) in the Dakhiliya region. Occidental Oman Gas, along with its partners, are committed to investing around $500 million in exploration activities targeting Habibah’s gas potential.
Dolphin Energy has begun the supply of Dolphin Gas to Oman. Dolphin Energy signed a Gas Sales Agreement with Oman Oil Company agreeing to supply the Sultanate with up to 200 million standard cubic feet a day of Dolphin Gas.
Transport & Communications
The Nawras consortium was awarded the second Integrated Fixed Public Telecommunications License by the Telecommunication Regulatory Authority (TRA). Nawras is the Qatari telecoms operator Qtel’s 56 per cent owned subsidiary in Oman. Also, the TRA has issued Class II licenses to five companies as resellers of basic mobile services in the Sultanate. The licenses were granted for a period of five years, but extendable if the firms concerned comply with their license obligations. The first phase development of a world-class airport in Sohar is already in progress. The airport will form a key component in a broader land, rail and air transport network that will strengthen the Batinah region’s development as a major centre for economic growth. The first phase development of the airport at Ras al Hadd is in progress. The airport is expected to be operational in 2010-11. In the new industrial city in Oman “Duqm”, The first phase of the Duqm International Airport project at a cost of US$70 million will be executed by Desert Line Projects company, while a consortium of Galfar Engineering & Contracting and South Korea’s Daewoo Engineering & Construction have won the contract to build a ship repair and drydock complex. Also a consortium of Consolidated Contractors Company, STFA of Turkey, and the Belgian-based Jan De Nul will undertake the expansion of the Duqm port complex at an additional cost of US$870 million. The new investment is in addition to an existing contract currently being executed by the consortium. As a result of the upgrade, the total investment in the Marine Works Infrastructure being executed has been scaled up to around US$1.3 billion. Oman plans to issue a major contract involving the construction of a deepwater bulk jetty at the Port of Sohar. Total investment is estimated at US$200 million. German group Sellhorn won a contract to provide consultancy work for the latest expansion of Salalah’s southern port. The work involves overseeing the design and construction of berths seven, eight and nine at the site. The state-owned Oman Shipping Company (OSC) is seeking to raise US$4 billion in new credit facilities to finance the ongoing expansion of the company’s fleet. The company aims to buy between 15 and 20 tankers for refined oil products, to meet rising demand. The Indian group Consulting Engineering Services (CES) won a contract to carry out a feasibility study for Oman’s 260-kilometre long Batinah Railway which will run along Oman’s northern coast. The company will plan all elements of the design for the railway, including passenger and freight services. The line is intended to provide an alternative to travelling by car on the Batinah highway.
Tourism & Real Estate
The first homes at “The Wave, Muscat” were completed and the keys were recently handed over to their first residents. The Wave is a US$805 million freehold Integrated Tourism Complex project and when complete will cover an area of 2.5 million square metres combining more than 4,000 residential homes, as well as retail, leisure and hotel accommodation, a marina and a golf course. Over 600 homes are currently under construction. Oman’s first Integrated Tourism Project, Muscat Hills, was to be opened the first 9 holes of the 18 hole championship green golf course in March 2009. The US$780 million project comprises an 18 hole green golf course, a gated residential development, a boutique resort hotel, premium office space, retail outlets and entertainment options. Al Madina A’Zarqa (Blue City) project is to be built over a 32 sq. km. water front at Al Sawadi, 45 minutes from Muscat. The first phase of the US$15 billion project to build a mega city is currently in progress. New tourism projects in Oman are expected to provide 10,000 direct jobs during the next five years.
Industrial Sector
The US$2.4 billion Sohar Aluminium smelter began operations on June 11, 2008, with capacity production approximately 350,000 metric tonnes per year. The company will export about 140,000 tonnes of its annual production, while the remaining 210,000 tonnes will be sold to local companies that have been formed to create a new downstream aluminum industry. Construction work on a major aluminum rolling mill was scheduled to commence at the Sohar Industrial Estate in the second quarter of 2009. The project promoted by Takamul Investment Company SAOC in partnership with Bahrain’s GARMCO, involves a capital investment of around US$325 million. The project will have a total capacity of 160,000 tonnes per year of aluminum general coil, foil and paint stock products. The rolling mill project will depend on hot metal as feedstock from the Sohar Aluminium smelter. Oman signed two contracts to the accelerated development of the iron ore pelletizing plant and distribution centre, which the Brazil-based conglomerate is developing at the industrial port with an investment of US$1.4 billion. The venture involves an iron ore pelletizing plant with a production capacity of nine million tonnes per year of direct reduction pellets. The first plant is due to come on stream in December 2010. In this regard also, Oman and Brazil have signed an agreement for the supply of gas for 20 years for the iron ore pelletizing plant of the Brazilian-based Vale company which will be set up at Sohar Industrial Port. Takamul Investment Company, a majority Omani government owned investment vehicle, plans to establish a ‘Minerals City’ in the Sultanate to serve as a hub for a number of ambitious minerals-based downstream processing projects. Key among these ventures is a magnesium-ferrosilicon project. The company is weighing the feasibility of developing a 30,000-tonnes-peryear capacity project at an estimated cost of US$250 million. Commissioning is slated for 2011. A salt/soda ash project is also planned in partnership with Indian business conglomerate Tata. Feasibility studies now under way into the US$450 million project, envisage an output of 100,000 tonnes of salt and 500,000 tonnes of soda ash. Takamul is also promoting a string of petrochemicals based downstream ventures. The biggest among these is a US$800 million Purified Terephthalic Acid (PTA) and Polyethylene Terephthalate (PET) project in association with an international partner. The venture, with a proposed capacity of 700,000 tonnes of PTA and 430,000 tonnes of PET, is planned to come on stream in the second quarter of 2012.
Source: Austro-Arab Trade Directory 2011.
The mentioned data are subject to modification. No responsibility is taken for the correctness of the details provided.
Last modified: 26 January 2011
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