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The positive outlook is partly credited to the new natural gas volumes from Khazzan field

The positive outlook is partly credited to the new natural gas volumes from Khazzan field



Economy to grow at 4pc in 2021-22: WB

Growth in Oman is projected to gradually pick up to an average of 4 per cent in 2021-22, buoyed by the introduction of VAT, says a World Bank report

November 2020

Following a sharp contraction in 2020 on account of low oil prices and disruptions from Covid-19, Oman’s economy is anticipated to make a positive recovery over the next two years, buoyed by a boost in local consumption and the introduction of Value-Added Tax (VAT), according to the World Bank.

The US headquartered financial institution said in its latest update that Oman’s economy is expected to manage an average four per cent of growth over the 2021-2022 timeframe, if an anticipated recovery gets under way. It partly credited this positive outlook to new natural gas volumes from the newly launched Ghazeer gas field in central Oman, which is expected to sustain strong energy demand and potentially fuel new investments as well.

“If conditions ease, growth in Oman is projected to gradually pick up to an average of 4 per cent in 2021-22, but very backloaded to 2022, partly due to a spike from the second phase of the Khazzan field,” said the World Bank in its update for October 2020.

“Gas field development has been critical to meet growing domestic and global demand, but it is not on a scale that is transformative in its own right,” it noted however. Earlier, energy major BP brought into operation the Ghazeer gas field, representing the second phase of its signature Khazzan development in Block 61.

Ghazeer’s operationalisation, well ahead of its scheduled launch in early 2021, underscores the Omani government’s efforts to ensure a sustainable supply of energy for the country’s power sector, as well as its rapidly expanding industrial sector — which are key to achieving Oman’s economic diversification goals, a report in Oman Daily Observer noted.

Total production capacity from Block 61, comprising both Khazzan and Ghazeer, is expected to rise to 1.5 billion cubic feet (bcf) of gas a day and more than 65,000 barrels a day of associated condensate.

With an estimated 10.5 trillion cubic feet (TCF) of recoverable gas resources, the block has the capacity to deliver approximately 35 per cent of Oman’s total gas demand, according to BP.




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