Overview
Small and medium enterprises in Oman’s energy sector represent a critical but underdeveloped segment of the value chain. The Riyada (Public Authority for SME Development) and Al Raffd Fund provide financing and incubation support, while the National SME Development Programme targets raising SME contribution to 35 percent of GDP by 2040. Within energy, SME participation is concentrated in services, maintenance, and distribution segments.
Key Indicators
| Indicator | Current | 2040 Target |
|---|---|---|
| SME Share of Sector | ~25-35% | 50%+ by 2040 |
| SME Employment | Growing | Major employer |
| Access to Finance | Limited | Improved |
Analysis
The SME ecosystem surrounding Oman’s energy sector shows both promise and structural constraints. While large enterprises like PDO, OQ Group, Shell, BP, TotalEnergies, OPAL anchor the sector, SMEs fill essential roles in supply chains, maintenance, specialised services, and last-mile delivery. Government procurement mandates requiring 10 percent SME allocation have increased opportunities, but access to finance remains the primary barrier. Bank lending to SMEs carries high collateral requirements, and venture capital availability is limited. The sector’s total investment of USD 25 billion FDI stock in upstream alone creates substantial subcontracting opportunities for qualified SMEs.
Challenges
Access to finance, limited management capacity, regulatory compliance burden, and competition from larger firms constrain SME growth. 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
Government procurement set-asides, incubator programmes, e-commerce platforms, and value chain integration with anchor tenants offer pathways. 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.