Oil and gas production expenditure is estimated at RO2.2bn in the 2019 budget, said a statement issued by the Ministry of Finance on Tuesday.
‘This includes the operational and capital costs of oil and gas production, and expenses required to maintain future oil and gas production as well as enhance oil and gas reserves’, the budget statement said.
In the previous year’s budget, the government had announced that it allocated around RO2.1bn, around 15 per cent higher than the 2017, for the hydrocarbon, which remains very crucial for a country like Oman. In 2017,
the government had allocated around RO1.82bn for the sector.
The hydrocarbon sector which includes both oil and gas, accounts for around RO7.4bn or 74 per cent of the total RO10.1bn estimated overall revenue in 2019. In the previous year’s budget, the government estimated that the earnings from hydrocarbon would be at RO6.76bn (71 per cent) of total estimated revenue of RO9.5bn.
According to senior officials from the oil and gas ministry, Oman remains one of the few countries across the world who had never scaled back funds allocated for the hydrocarbon sector despite suffering heavily from the sudden fall in global crude prices over the past few years.
While increasing the fund allocation for the oil and gas sector, the budget statement also said that the government will emphasis more on improving efficiency of the sector.
The budget statement said that the government will try to rationalise spending by ‘raising the efficiency of spending on oil and gas production, by using the latest methods’ of production.