Oman Foresees $1.3bn Deficit

MUSCAT, 6 January 2004 — Oman has adopted a budget for 2004 that foresees a deficit of 500 million riyals ($1.3 billion), the official ONA news agency reported yesterday, quoting the economy minister. Ahmed Meki said the budget puts spending at 3.425 billion riyals ($8.9 billion) and income at 2.925 billion riyals ($7.6 billion).

Oil revenues account for 57 percent of income, the minister said, citing a drop from 74 percent “in the past years ... due to the drop in daily oil production rates.”

Liquefied gas and oil condensates account for nine percent of revenues, natural gas for three percent, the sale of oil condensates for five percent, while “other current revenues” that are unspecified account for the remainder.

Oil revenues were calculated on the basis of a price of $21 a barrel. Meki said projected spending for fiscal 2004 was 11 percent higher than the previous year to cover growth in government services, such as health, education, electricity and water. Oman is a non-OPEC crude producer with current output of around 860,000 barrels per day (bpd) after it agreed in December 2001 to cut production by 40,000 bpd to back OPEC’s bid to force up crude prices.

Oman also has proven gas reserves of around 660 million cubic meters (22 trillion cubic feet), with potential reserves more than double that figure.

The sultanate is working to diversify the economy which is heavily dependent on oil. These efforts have included the development of gas resources, in an effort to boost industrialization, as well as tourism.