OMAN'S ENERGY REVOLUTION: BRIDGING HYDROCARBONS AND GREEN HORIZONS

Oman, a nation historically anchored by its significant hydrocarbon wealth, is proactively navigating the complexities of a global energy transition, moving beyond its legacy oil and gas endowments while simultaneously leveraging them to build a robust foundation for a greener future

- ABDULAZIZ KHATTAK

OMAN'S energy sector stands at a pivotal juncture, balancing its historical reliance on oil and gas with an ambitious pivot towards renewable energy and green hydrogen.

Guided by Oman Vision 2040, the Sultanate is navigating the global energy transition with strategic investments, leveraging its abundant natural resources and geographic advantages to emerge as a regional leader in sustainable energy.

PAST FOUNDATIONS & CURRENT POSITION

Oman’s energy story began with oil exploration in the late 1960s, with production escalating in the 1970s and 1980s before hitting a peak of 250,000 barrels per day (bpd).

Production then tapered to around 88,000 barrels per day by 2005. Natural gas followed, fuelling domestic electricity and industrial sectors, with approximately 70 per cent of produced gas consumed internally. Oman LNG entered operation in 2000, linking domestic gas to global markets.

As of 2023, renewables comprised just 3.6 per cent of electricity generation (1.6 TWh of 44.3 TWh total).

Yet, fossil fuels still dominate the energy mix, and substantial reserves remain, with gas reserves estimated to last 30 years at current rates.

In 2021, the country produced approximately 1.056 million barrels of crude oil per day, a figure that has seen fluctuations but consistently underpinned national revenues.

Natural gas has played an increasingly crucial role, largely powering domestic electricity generation through efficient gas-turbine-fired generators.

Historically, Oman’s electricity consumption has been predominantly met by natural gas, accounting for around 95 per cent of total generation in 2022.

While oil made up a small percentage, solar photovoltaic (PV) contributed only about 2.5 per cent in the same year, though this share is rapidly increasing.