Oman » Introduction

Basic Economic Facts

GDP composition by Sector

The economy of Oman is dominated by its dependence on crude oil. A joint venture called IPC drilled a number of dry holes from 1956 onwards though the logistics of doing this were extremely difficult due to lack of any transportation infrastructure.

A lack of success, combined with worsening logistical problems and a glut of oil on the world market, led most of the partners to withdraw from the venture in 1960. Only Royal Dutch/Shell and Partex opted to remain in Oman to continue the search for oil. They struck oil at Fahud in 1962 at a site just some few hundreds of metres from the last dry hole.

In June 1967, the Compagnie Française des Pétroles rejoined the partnership by taking over 10% of Partex's equity share, resulting in the following shareholding: Shell 85%, Compagnie Française des Pétroles 10% and Partex 5%. The company changed its name to Petroleum Development (Oman). Shortly followed by the first export of Omani oil on 27 July 1967.

On 1 January 1974 the Government of Oman acquired a 25% shareholding in the Petroleum Development (Oman); half a year later they increased it to 60%, backdated to the beginning of the year. As a result foreign shareholding in PD(O) was now made up of Royal Dutch/Shell (34%), Compagnie Française des Pétroles (now Total) (4%) and Partex (2%).

In a Royal Decree of 15 May 1980, the company was registered as a limited liability company (LLC) under the name Petroleum Development Oman.

Today Oman produces around 700,000 barrels (110,000 m³) of oil per day and there have been significant discoveries of natural gas and development of a liquefied natural gas terminal. Oil represents about 90% of Oman's exports.

Oman's economic performance improved significantly in 2000 due largely to the upturn in oil prices. The government is moving ahead with privatization of its utilities, the development of a body of commercial law to facilitate foreign investment, and increased budgetary outlays. Oman continues to liberalise its markets and joined the World Trade Organization in November 2000. GDP growth improved in 2001 despite the global economic slowdown.