Oman's Energy Industry

Oman: an oil and gas economy in transition

Oman’s oil and gas sector has long been a cornerstone of economic development. Commercial production began in 1967, and hydrocarbons remain a major source of government revenue and a key contributor to national GDP. Although subject to market and policy shifts, oil and gas continue to play an important role in export earnings and public finances.

Oman is recognised as one of the largest non-OPEC oil producers in the Middle East and maintains an upstream landscape featuring both national and international operators. The Ministry of Energy and Minerals is responsible for setting overarching policy direction, supported by state entities such as the integrated energy group OQ, Energy Development Oman (EDO) and NOC Petroleum Development Oman (PDO), as well as other state-run players with lesser stakes in upstream, midstream and downstream operations.

PDO is the leading upstream operator, responsible for much of Oman’s crude and natural gas production and a pioneer in the introduction of EOR techniques to sustain output from mature fields. International companies – including Occidental Petroleum and BP – hold significant positions in major concessions such as Block 61’s Khazzan-Makarem gas development.

Under the Oman Vision 2040 development programme, the country is making progress towards expanding non-oil sectors and strengthening its industrial, advanced manufacturing and services activities.

Oman has also formalised a comprehensive energy transition roadmap with a commitment to achieve net-zero emissions by 2050 through investments in renewables, energy efficiency and low-carbon technologies. Natural gas accounts for more than 90% of Oman’s total power generation, but renewables – particularly solar and wind – are being scaled to bring their contribution to the energy mix to 30% by 2030.

Green hydrogen is emerging as a new industrial pillar, supported by land allocation programmes, regulatory frameworks and international tender rounds led by Hydrom, the administrator of all renewable hydrogen projects in Oman and the orchestrator of the national hydrogen strategy. Leveraging its ample potential for renewables, the country aims to produce 1 million tonnes per year, primarily for export.