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Hatim Al-SHANFARI

Oman Society of Contractors

11 January 2016

Oman Economic Outlook

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Outline of the Presentation

❑Global Energy Outlook

❑Oman Economic Outlook

❑The Construction Sector in Oman

❑Conclusion

3Source: BP Statistical Review of World Energy June 2015

Crude Oil: Proved Reserves (at end 2014)

Country Share of World Total Reserves/Production ratio

(years)

Venezuela 17.5 % +100

Saudi Arabia 15.7 % 64

Canada 10.2 % +100

Iran 9.3 % +100

Iraq 8.8 % +100

Russia 6.1 % 26

USA 2.9% 11Source: BP Statistical Review of World Energy June 2015

Crude Oil: Proved Reserves (at end 2014)

Country Share of World Total Reserves/Production ratio

(years)

Saudi Arabia 15.7 % 64

Kuwait 6.0 % 89

UAE 5.8 % 72

Qatar 1.5 % 36

Oman 0.3 % 15

Source: BP Statistical Review of World Energy June 2015

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Source: UCube by Rystad Energy; Interactive published Nov. 23, 2015

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Source: UCube by Rystad Energy; Interactive published Nov. 23, 2015

8Source: BP Statistical Review of World Energy June 2015

Natural Gas: Proved Reserves (at end 2014)

Country Share of World Total Reserves/Production ratio

(years)

Iran 18.2 % +100

Russia 17.4 % 56

Qatar 13.1 % +100

Turkmenistan 9.3 % +100

US 5.2 % 13

Saudi Arabia 4.4 % 75

UAE 3.3 % +100Source: BP Statistical Review of World Energy June 2015

Natural Gas: Proved Reserves (at end 2014)

Country Share of World Total Reserves/Production ratio

(years)

Qatar 13.1 % +100

Saudi Arabia 4.4 % 75

UAE 3.3 % +100

Kuwait 1.0 % +100

Oman 0.4 % 24

Bahrain 0.1%

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Source: BP Statistical Review of World Energy June 2015

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Market Performance – in 2015

Indicator YTD

MSM - 30 -15 %

S&P GCC -18%

Brent Crude -44%

NYMEX Natural Gas -34%

Bloomberg Commodity -25 %

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Source: MSM & Bloomberg

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Macro-Economic Indicators for Oman –Million RO

Indicator 1990 2000 2010 2014

GDP 4,493 7,501 22,548 31,450

Total Government

Expenditure1,887 2,656 7,965 15,172

Commercial Banks

Total Credit 972 2,981 10,724 16,898

CBO Total Assets 899 1,054 5,297 6,639

22Source: National Centre for Statistics & Information, CBO, and IMF

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❑The Construction Sector in Oman

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Macro-Economic Indicators for Oman –Million RO

Indicator 2014 2015 2016 2017

Oil Prices 103 60 45 55

Growth Rates - 3% - 42% - 25% + 38%

GDP 31,450 26,244 25,038 27,685

Growth Rates 5% - 17% - 5% +11%

Gov. Spending 15,172 14,100 11,900 12,700

Growth Rates 8% - 7% - 16% + 7%

32Source: 9th Five Year Plan - The Supreme Council for Planning

Macro-Economic Indicators for Oman –Million RO

Indicator 2014 2015 2016 2017

Oil Prices 103 60 45 55

Growth Rates - 3% - 42% - 25% + 38%

Investment 3,584 3,170 2,500 2,900

Growth Rates 15% - 12% - 21% + 16%

Civil Invest. Spending 2,094 1,650 1,200 1,400Growth Rates 20% - 24% - 27% + 17%

Oil & Gas Capex 1,419 1,520 1,300 1,500

Growth Rates 8% 7% - 14% + 15%

33Source: 9th Five Year Plan - The Supreme Council for Planning

The Way Forward

❖ The future for businesses is likely to be :

❖ Highly unpredictable

❖High Uncertainty in Cash-flow

❖Higher Cost of doing business

✓ What is needed:

✓ More flexibility in labour market

✓ Less bureaucracy

✓ More investment

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Thank you