VZCZCXYZ0002
RR RUEHWEB

DE RUEHMS #0467 1701043
ZNR UUUUU ZZH
R 181043Z JUN 08
FM AMEMBASSY MUSCAT
TO SECSTATE WASHDC 9731

UNCLAS MUSCAT 000467 
 
SENSITIVE 
SIPDIS 
 
STATE FOR NEA/ARP, EEB/ESC/IEC/EPC 
 
E.O. 12958: N/A 
TAGS: EPET ENRG ECON MU IR
SUBJECT: OMAN LOWERS OIL OUTPUT PROJECTIONS 
 
REF: MUSCAT 303 
 
¶1. (U) On June 15, Minister of Oil and Gas Dr. Mohammed bin 
Hamad al-Rumhy told media outlets that Oman's 2008 oil 
production figures had been revised downward from a projected 
790,000 barrels per day (bpd) to 750,000 bpd.  Oman reported 
a production rate of 743,000 bpd over the first four months 
of 2008, however, a 4.1% increase from the 714,200 bpd figure 
posted for the same time period in 2007.  In efforts to 
further increase production levels, the government announced 
that the country's main producer, Petroleum Development Oman 
(PDO), will outsource 18 small fields to Omani-based 
Petrogas, a division of MB Petroleum, for exploration. 
 
¶2. (U) The Minister also provided a status update on the 
completion of a gas compressor station being built in 
al-Buraimi that would facilitate gas flows coming in from 
Qatar via the Dolphin project.  He estimated that completion 
of the unit would be finished by July in order for Oman to 
accept its allocation of 200 million standard cubic feet. 
The Minister acknowledged that gas still remained "very 
tight," and that Oman is continuing discussions with Iran on 
sourcing additional supplies of gas, though the two sides 
have "not finalized anything." 
 
¶3. (SBU) Comment.  The revised figure announcement does not 
come as a surprise, as a close Embassy contact in the oil 
sector told Econoff in April that Oman's producers would have 
been very hard pressed to meet the government's optimistic 
2008 outlook.  And even though Oman's 2008 budget remains 
premised on the production rate of 790,000 bpd, high oil 
prices and government's conservative estimation of oil prices 
should keep its finances in the black.  End Comment. 
FONTENEAU