Oman to spend up to $15B over 10 yrs

Oman to spend up to $15B over 10 yrs

With Oman projecting a record spend this year, the Sultanate is planning to do more to create jobs for nationals and develop refinery and petrochem infrastructure.

May 25, 2011 10:52 by Reuters

Oman plans to invest up to $15 billion in new petrochemical and infrastructure projects in the southeast of the Sultanate over the next 10 years and create thousands of new jobs, its finance minister said on Tuesday.

The small non-OPEC oil exporter has been hit by protests demanding jobs, higher salaries and an end to graft over the past three months as unrest spread through the Arab world.

“We are planning to spend between $10 to $15 billion in Duqm in new projects, including the refinery and a petrochemical plant,” Finance Minister Darwish al-Balushi told an investment and economic forum in the sultanate’s capital.

“These projects would open up … between 15 to 20,000 jobs for the nationals in the next 10 years,” he said.

The port town of Duqm has been earmarked as the next industrial city after Sohar, an epicentre of protests, with the sultanate’s government planning to spend heavily on airport, dockyard, refinery and petrochemical plants among other projects.

“We are not talking about one project or two but this investment will cover the infrastructure of the whole town in the next ten years,” a finance ministry source told Reuters. The turmoil prompted Sultan Qaboos bin Said, a U.S. ally who has ruled Oman for 40 years, to promise a $2.6 billion spending package in April. He also announced plans to create 50,000 new jobs, established a new monthly unemployment benefit and reshuffled his cabinet.

Oman’s wealthier Gulf Arab neighbours unveiled a $20 billion aid package in March for the sultanate and unrest-hit Bahrain to help ease social tensions threatening stability in their own countries.

In December, Oman projected a record expenditure of 8.130 billion rials ($21.12 billion) in its 2011 budget, up 13.2 percent from the previous year.

The 2011 budget was set with a deficit of 850 million rials, or 3.8 percent of gross domestic product, based on an oil price of $58 per barrel, after the government posted a deficit of 48.4 million rials last year.

However, analysts polled by Reuters in March expected Oman to show a budget surplus of 5.3 percent of GDP, helped by robust oil prices. The country sold its crude at an average price of $88.4 per barrel in the first three months of 2011. ($1=.3850 Omani Rials) (By Saleh al-Shaibany; Additional reporting by Sara Anabtawi; Writing by Martina Fuchs and Martin Dokoupil in Dubai; Editing by Susan Fenton)