Oman's oil minister blames financial crisis for possible project slowdown
Oman's Oil and Gas minister, HE Mohammad bin Hamad bin Seif al-Rumhy, has conceded that Oman will have to slow down oil and gas development projects and possibly also the Duqm Refining and Petrochemical Complex as a result of the global financial crisis.
Rumhi was talking to a Reuters correspondent at the Abu Dhabi International Petroleum Exhibition and Conference at which Gordon Brown, the British Prime Minister, spoke at his first appointment in the UAE, on his four-day tour of the Gulf. Brown is seeking to raise funds at the conference on behalf of the International Monetary Fund (IMF) to assist countries badly hit by the crisis.
Although Rumhi's pronouncement might be thought to tally with the caution that could accompany drafting of next year's budget, (see my previous posting) , he stated that the problem actually lies with external project finance. It's far more difficult to raise funds now than even just six months ago. Even if foreign loans are to pay for these downstream projects, Oman has to guarantee the payback.
It doesn't help that the development costs are rising.
And while Iran remains ebullient about Oman's cooperation in development of the Kish oil field, Rumhi would say only that talks are still ongoing.
The UAE's oil minister announced this morning that the UAE had implemented oil production cuts agreed by OPEC. Kuwait and Nigeria were said to have informed customers that there would be cuts in supply from December. Iran is reported to have told the Indian Oil Corporation that supply would be reduced by 5% from this month. But there's no word yet of imminent production cuts by Saudi Arabia, the biggest oil producer.
Oman is not a member of OPEC, but keeps an interested watching brief. Read this very interesting background on HE Muhammad al-Rumhi, his plans for Petroleum Development Oman and Qalhat LNG, and the development of Oman's oil and gas industry. Rumhi's stated aim is to optimise oil and gas production as a long-term strategy in Oman.
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As a measure of the impact of inflation in Oman, the total cost of The Wave, a real estate project near Muscat has doubled from '$2 billion (Dh7.3bn) to $4bn since its launch nearly two years ago.' Nick Smith, the CEO, blamed inflation for 15-20% of the increase in project cost. The remainder is due to the increased construction costs for building 'new phases and hotels.' ie, amending the project spec.
Rumhi was talking to a Reuters correspondent at the Abu Dhabi International Petroleum Exhibition and Conference at which Gordon Brown, the British Prime Minister, spoke at his first appointment in the UAE, on his four-day tour of the Gulf. Brown is seeking to raise funds at the conference on behalf of the International Monetary Fund (IMF) to assist countries badly hit by the crisis.
Although Rumhi's pronouncement might be thought to tally with the caution that could accompany drafting of next year's budget, (see my previous posting) , he stated that the problem actually lies with external project finance. It's far more difficult to raise funds now than even just six months ago. Even if foreign loans are to pay for these downstream projects, Oman has to guarantee the payback.
It doesn't help that the development costs are rising.
And while Iran remains ebullient about Oman's cooperation in development of the Kish oil field, Rumhi would say only that talks are still ongoing.
The UAE's oil minister announced this morning that the UAE had implemented oil production cuts agreed by OPEC. Kuwait and Nigeria were said to have informed customers that there would be cuts in supply from December. Iran is reported to have told the Indian Oil Corporation that supply would be reduced by 5% from this month. But there's no word yet of imminent production cuts by Saudi Arabia, the biggest oil producer.
Oman is not a member of OPEC, but keeps an interested watching brief. Read this very interesting background on HE Muhammad al-Rumhi, his plans for Petroleum Development Oman and Qalhat LNG, and the development of Oman's oil and gas industry. Rumhi's stated aim is to optimise oil and gas production as a long-term strategy in Oman.
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As a measure of the impact of inflation in Oman, the total cost of The Wave, a real estate project near Muscat has doubled from '$2 billion (Dh7.3bn) to $4bn since its launch nearly two years ago.' Nick Smith, the CEO, blamed inflation for 15-20% of the increase in project cost. The remainder is due to the increased construction costs for building 'new phases and hotels.' ie, amending the project spec.
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