Overview
Oman’s energy sector is the cornerstone of the national economy and a major focus for both domestic and foreign investment. The Sultanate is a significant oil and gas producer with proven reserves and an active exploration programme. Under Vision 2040, Oman is pursuing a dual strategy of optimising hydrocarbon production while building a world-class renewable energy and green hydrogen industry. The Ministry of Energy and Minerals oversees the sector, with key state entities including Petroleum Development Oman, OQ Group, and the Oman Hydrogen Centre leading investment initiatives. The energy transition presents transformative investment opportunities across the value chain from upstream production to clean energy infrastructure.
Key Facts
Oman produces approximately one million barrels of oil per day and is a member of OPEC Plus. Natural gas production supports both domestic consumption and LNG exports through the Oman LNG facility. Enhanced oil recovery techniques are being deployed to maximise output from mature fields. The national renewable energy target calls for 30 percent of electricity generation from renewable sources by 2030. Green hydrogen projects with a combined investment value exceeding 30 billion US dollars are in various stages of development. Solar irradiance levels in Oman are among the highest globally, supporting photovoltaic and concentrated solar power projects.
Regulatory Framework
Upstream oil and gas operations are governed by concession agreements and production sharing contracts administered by the Ministry of Energy and Minerals. The Authority for Public Services Regulation oversees the electricity and water sectors including tariff setting and licensing. Environmental regulations require impact assessments and ongoing monitoring for all energy projects. The green hydrogen framework includes dedicated regulations for production, storage, transport, and export of hydrogen and its derivatives. Grid connection and power purchase agreements are regulated to ensure reliable energy supply and fair market access.
Opportunities
Enhanced oil recovery technologies offer opportunities for specialised service companies and technology providers. Utility-scale solar and wind power projects are being tendered under the national renewable energy programme. Green hydrogen production for export to European and Asian markets represents a flagship investment area. Downstream petrochemical investments benefit from feedstock availability and free zone incentives. Energy efficiency services and smart grid technologies are in growing demand.
Considerations
Oil and gas investments are subject to commodity price volatility and OPEC production agreements. Renewable energy projects require long-term offtake agreements to ensure revenue predictability. Green hydrogen technology is still maturing, and commercial-scale production timelines carry execution risk. Environmental compliance costs should be factored into project economics. Investors should assess the regulatory stability and contractual certainty of the energy framework before committing capital.