The upstream sector covering exploration, drilling, and early-stage production remains the beating heart of Oman’s energy economy. Even as the world accelerates toward renewables, the upstream industry continues to anchor national revenues, employment, and foreign investment.
According to the Ministry of Energy and Minerals, oil and gas revenues accounted for roughly 68% of Oman’s total government income in 2024, generating OMR 7.45 billion from oil and OMR 1.82 billion from gas. Combined, hydrocarbons contributed around OMR 9.3 billion, out of OMR 12.78 billion in total revenue underscoring their centrality to the fiscal framework. The country’s average crude production stood at about 1.06 million barrels per day (bpd), with exports averaging 850,000 bpd.
The upstream sector covering exploration, drilling, and early-stage production remains the beating heart of Oman’s energy economy. Even as the world accelerates toward renewables, the upstream industry continues to anchor national revenues, employment, and foreign investment. Sustained upstream investment remains critical — OPEC estimates nearly $14.9 trillion in global upstream capital requirements through 2050, signalling that hydrocarbons will remain indispensable to global energy security for decades.
Investment Depth and Economic Weight Oman’s upstream industry has been a magnet for foreign capital. By Q1 2025, the sector attracted OMR 24.7 billion in Foreign Direct Investment (FDI); nearly 81% of total national FDI inflows, highlighting investor confidence in the country’s geological potential and policy stability. The Petroleum Development Oman (PDO) alone contributed an estimated US$ 22.5 billion in 2024 revenues, serving as both a commercial and technological backbone for the nation’s energy ambitions. Oil and gas activities contributed OMR 12.2 billion to GDP in 2023, with natural gas adding another OMR 1.8 billion. The combined petroleum sector continues to underpin diversification efforts — not as a relic of the past, but as a foundation upon which Oman builds a sustainable, innovation-driven economy.
EOR and Technological Frontiers Oman has long been a regional leader in Enhanced Oil Recovery (EOR): a suite of advanced extraction methods that extend the productive life of mature fields. EOR now contributes nearly 19% of PDO’s crude output, a figure projected to reach 28% by 2031. Fields such as Marmul, Amal, and Harweel have become laboratories for innovation, deploying polymer flooding, miscible gas injection, and solar steam technologies to unlock complex reservoirs. New operators, including CC Energy Development, Occidental Oman, and Tethys Oil, are driving exploration in new blocks, targeting both tight oil and conventional reservoirs. These efforts signal a deliberate push to modernize Oman’s upstream portfolio, one grounded in data, digital transformation, and environmental efficiency.
Balancing Growth with Sustainability Despite its strengths, the sector faces undeniable headwinds: rising operational costs, supply chain disruptions, and tightening emission standards. Yet Oman’s upstream resilience lies in its adaptability. The government’s Vision 2040 blueprint calls for cleaner production processes, carbon management, and greater collaboration between public and private stakeholders.
PDO’s own decarbonization roadmap — including large-scale solar integration and flaring reduction initiatives reflects this shift. With average oil prices around USD 82–83 per barrel in 2024, Oman has maintained fiscal stability while investing in future-ready technologies. In a rapidly evolving global energy landscape, Oman’s upstream sector is not merely surviving, it is evolving. By aligning economic strategy with technological innovation, Oman is positioning itself as a resilient energy player that bridges the hydrocarbon and low-carbon eras. With its vast geological resources, investor-friendly environment, and commitment to efficiency, the upstream sector will continue to serve as both a revenue generator and a testbed for sustainable growth, ensuring Oman’s energy leadership well into the next generation.
