Tuesday, November 25, 2008

National Day Holiday period, slow times in Muscat

Its been hard to find any real news lately, as Oman settles down for a long period of holidays (National Day and Eid coming in early December).

First: Occidental and the Abu Dhabi government's Development investment company Mubadala were awarded rights to a piece of Oman to explore and produce gas. The Omani Government took a 20% percentage via Oman Oil Company. The deal is good for Oman, especially in these tight credit times, because it will provide an effective loan of $500 million to fund development, money that will only be liable to be repaid from gas production. The area already contains some small undeveloped gas fields previously discovered for the Government by Petroleum Development Oman, and the area excludes fields already found and developed by the Government (like the Kauther field).

Haven't heard if OOC's 20% piece is 'carried' (ie if they will have to pay their share of the costs or not), but as with all such deals for gas in Oman the key question is: who will pay market price for the gas? Another 2 more similar deals are being lined up for next year, one with Malaysian state oil company Petronas and another with a small US company called Hertitage Oil and Gas. [post press correction: that's Harvest Oil and Gas, not Heritage. Mis-remembered!] The terms of these deals are still being negotiated apparently. And word from my fiends in the Ministry is that the Occidental deal will be expanded to include oil, but the terms couldn't be finalised in time for National Day so only a gas deal was inked.

NEW YORK, Nov 24 (Reuters) - Occidental Petroleum Corp (OXY.N: Quote, Profile, Research, Stock Buzz) and Abu Dhabi investment firm Mubadala Development Co have signed an exploration and production sharing agreement with the Sultanate of Oman, the companies said in a joint release on Monday.

The agreement allows the parties to develop four existing gas fields and explore for new discoveries in a newly formed contract area in Northern Oman. The 20-year agreement covers an area of 2,269 square kilometers (876 square miles).

Occidental will serve as operator under the agreement and hold a 48 percent interest, with Mubadala holding 32 percent and the Oman Oil Company holding the remaining 20 percent.

Total capital investment in the contract area is expected to be about $500 million over the next four years.

Second, the infamous rape at PDO viral-email flurry.
I've been trying to track down any actual facts on the email, alleging a serious sexual attack in PDO on the fireworks night of Nov 6th, that ripped around the Muscat expat community. The email and PDO's official statement were posted on comments to an earlier post of mine on PDO. I had received the emails as well of course, from many sources, but I hadn't posted the story because, well, it was highly inflamatory and there was no independent evidence at all of such an attack, plus the email talked of a cover up by Senior Managers at PDO which did not ring true at all.

That lack of evidence continues to be the status. My sources tell me that there has been no actual complaint made, and no comment from the supposed source of the original email despite emails and public appeals, there remains just that original email. So, for now, my verdict is that its probably not true, and the email was either a case of Chinese whispers gone wrong, perhaps based on some real or imagined teenage underage sexual adventures, or a deliberate hoax. There are now hybrid rumours circulating, such as one I was forwarded that talked of the event being captured on CCTV. There are no CCTV cameras at PDO cub, BTW.

I'll keep a watch out, but the signs are not good for any more actual facts in this case.

Lastly, the mighty brain trust that is Oman's Majlis Al Shura apparently rubber stamped the 2009 budget drafted by HE Mr. Macki, Minister of the National Economy. The story is almost comical. The idea that the Majlis can effectively challenge someone as smart and well supported as HE Macki on something this important is a joke. Not only are the Majlis members elected mostly on local tribal grounds and are banned from forming political parties, but they have no effective independent civil service to back them up. As a result, they are as effective a challenge as a moist towelette to someone as well prepared as HE Macki. See Times of Oman story.

They do, however, serve as an important source of patronage and 'wasta' within Government for low level things. As a result of their close contacts within the Government, and their ability to kick up a fuss, they have bypassed the previously powerful system of local Walli. So if your drains are a problem, or your roads full of potholes, a complaint to your Majlis member is of more use than the Walli.

Majlis okays economic panel’s report on draft of 2009 budget
Monday, November 24, 2008
MUSCAT — The Majlis Al Shura yesterday held its second session of the second annual sitting of the sixth term under the chairmanship of Sheikh Ahmed bin Mohammed Al Isa’ee.

The Majlis discussed the report of the economic committee on its study on the state general draft budget for 2009 in the presence of Ahmed bin Abdulnabi Macki, minister of national economy and deputy chairman of the Financial Affairs and Energy Resources Council and a number of senior officials at the national economy and financial sectors. The Majlis approved the committee’s report on the draft budget, and decided to refer it to the Council of Ministers, in accordance with the Majlis internal regulation, issued by Royal Decree No. 71/2004 on principles of reviewing the state’s general budgets and plans.

Sheikh Isa’ee underlined the importance of cooperation between the Majlis and the government to achieve the national development goals at all levels and sectors. Macki briefed the Majlis on major aspects of the state’s general draft budget for 2009.


  1. Minor point. Heritage Oil is a Canadian company quoted in the UK market.

    It is impossible to get any information from any of the news reports which might reveal exactly where the new consortium is going to work. Which blocks have they taken?

  2. There have been times when Majlis Al Shura. gave a few ministers a hard time and they were forced to backtrack some plan or implement one because of them.

    By the way, its Macki and not Mackie :)

  3. Anon
    Sorry, it's Harvest Oil and Gas, not Heritage.

    Yes, true, but its rare and usually on non-technical aspects.

    And thanks for the spelling correction - HE Macki now corrected!


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