Oman to boost output of crude

Muscat

OMAN, the biggest Middle Eastern oil producer that's not a member of the Organization of Petroleum Exporting Countries (Opec), is boosting crude output to as much as possible with the global price rout over, Salim Al Aufi, undersecretary of the oil and gas ministry, has said. Oman will produce 980,000 barrels a day this year, he said in an interview in Muscat on Sunday. That would be 4 per cent higher than in 2013, according to BP Plc data. Oman will provide 2014 production figures in April.

"It's crucial that we continue executing the future projects," Mr Al Aufi said. "It's crucial that we continue the seismic activities and the exploration activities because when the market turns around, we need to have these opportunities identified and ready to go." Rising supply from the US to Russia is contributing to a worldwide crude surplus that Oman estimates at one million barrels a day. Brent crude futures have climbed 5.3 per cent this year and added 14 US cents to US$60.36 a barrel on the London-based ICE Futures Europe exchange at 1137 am Singapore time. The contract fell 48 per cent last year.

Governments in the region have had to reduce subsidies on diesel, natural gas and utilities while companies cut billions from capital budgets because of low oil prices. Qatar Petroleum and Royal Dutch Shell Plc called off plans to build a US$6.5 billion petrochemical plant.

Oman's Budget Oil and gas accounts for 79 per cent of Oman's revenue, Mr Al Aufi said. With a projected deficit of 2.5 billion rials (S$8.84 billion), Oman's 2015 budget assumes an oil price of US$75 a barrel. A balanced budget would need oil to be over US$100, he said. Oman has no plans to join Opec, which controls about 40 per cent of the world's crude output, he said. BLOOMBERG