03:34 pm - Tuesday 26 May 2015

Oman records $2.15b surplus

By staff - Thu Dec 15, 12:20 pm

High crude output allied with a sharp rise in oil prices to allow Oman to record one of its largest budget surpluses in the first 10 months of 2011 despite a sharp rise in expenditure, according to official data.

After registering a deficit of around RO91.2 million ($510 million) in the first 10 months of 2010, the Gulf country’s budget balance turned into a massive surplus of RO830.1 million ($2.15 billion) in the first 10 months of 2011, showed the figures by the Omani ministry of national economy.

The massive surplus was mainly a result of a 60 per cent rise in oil export earnings to nearly RO7.15 from RO4.45 billion due to a sharp rise in crude prices and Oman’s oil production to nearly 882,000 barrels per day from 860,000 bpd in the same period. High oil income boosted the country’s total actual revenue by about 44 per cent to RO9.31 from RO6.44 billion.

Actual expenditure swelled by nearly 19 per cent to RO6.95 billion from around RO5.83, the report showed.

A breakdown showed current expenditure expanded by 18.4 per cent while capital spending grew by 9.2 per cent. There was also an increase of 2.6 per cent in allocations for oil production and 0.4 per cent for gas.

In a recent report, the Abu Dhabi-based Arab Monetary Fund (AMF), a key Arab League establishment, expected Oman to record a much higher fiscal surplus through 2011 because of an increase in its crude output and nearly 40 per cent rise in oil prices above its budgeted price of $58 a barrel.

Oman, which is not an Opec member, had projected a shortfall of RO850 million when it announced its record 2011 budget early this year.

But it massively revised up the gap to RO1,850 million after Sultan Qaboos approved new jobs and hefty pay rises for Omani government employees in response to demands during unrest in two months ago.

In its latest report, Oman’s central bank said that the budget deficit for 2011 was revised up following approval of extra spending in April.

It said the 2011 budget was based on an average crude oil price of $58 and production of 896,000 barrels per day.

Oman, which controls around five billion barrels of oil reserves, expects to boost spending in its 2011-2015 development plan by a whopping 113 per cent as it expects high oil prices and is pursuing plans to boost crude output.

Announcing the eighth development plan early this year, Oman’s Minister of National Economy Ahmed bin Abdulnabi Mekki said it would aim to create between 200,000 and 275,000 jobs for Omanis, who have become a majority in their country after they were a minority two decades ago.

“The plan envisages spending of RO30bn, nearly 113 per cent above the budgeted spending in the previous plan,” he said. He said development expenditure would be as high as RO112bn, including around RO5.6bn on new projects and the rest for development plans and ventures that were approved during the seventh five-year scheme

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