Overview
Physical infrastructure underpinning Oman’s energy sector spans transport networks, utilities, industrial zones, and specialised facilities. The government has committed significant capital to infrastructure development, with the national infrastructure pipeline valued at over USD 50 billion across all sectors. For energy specifically, infrastructure investment of USD 25 billion FDI stock in upstream alone targets capacity expansion, connectivity improvement, and modernisation of existing assets.
Key Indicators
| Infrastructure Element | Current Status | 2040 Plan |
|---|---|---|
| Crude Production | ~900,000 bpd | Maintain 800-900k bpd |
| GDP Contribution | ~45% | <20% by 2040 |
| Omanisation Rate | ~72% | 90%+ by 2040 |
Analysis
Infrastructure quality and availability significantly determine the competitiveness of Oman’s energy sector. The Sultanate’s geographic advantages (3,165 km coastline, strategic location between Asia and Africa) are leveraged through purpose-built infrastructure. PDO, OQ Group, Shell, BP, TotalEnergies, OPAL benefit from dedicated industrial zones, port access, and utility connections. However, infrastructure gaps persist in secondary cities and remote governorates, creating geographic disparities in sector development. The Oman Rail project (2,200 km) and road expansion programmes will enhance connectivity, while digital infrastructure (5G, fibre) enables technology-intensive operations.
Challenges
Infrastructure financing gaps, construction delays, maintenance backlogs, and geographic dispersion increase costs. Oil price volatility, reserve depletion risk, high breakeven cost (~USD 75/bbl), slow progress on enhanced oil recovery, and the need to pivot toward green hydrogen at scale.
Opportunities
PPP models for infrastructure delivery, modular construction approaches, smart infrastructure integration, and cross-sector infrastructure sharing reduce costs and improve utilisation. Green hydrogen mega-projects (HYPORT Duqm, 25 GW), solar irradiance advantage (>2,000 kWh/m2/yr), carbon capture and storage potential in depleted reservoirs, and downstream petrochemical expansion.
Vision 2040 Targets
Reduce hydrocarbon GDP share to below 20 percent; achieve 30 percent renewable energy in the electricity mix; become a top-three global exporter of green hydrogen by 2040; increase Omanisation to 90 percent.