Abu Dhabi: Oman’s oil minister said the country is looking at cutting costs due to low oil prices, adding that the country is losing $55 million (Dh202 million) a day.
Mohammad Al Rumhym, Oman’s Minister of Oil and Gas, said that the country’s current production level was around one million barrels per day.
“We are cutting costs but we are not cutting projects... We can blame Russia, Saudi Arabia and China [for lower oil prices] but the bottom line is that it’s our responsibility...” Al Rumhym said.
“One of the victims of the current market prices will be technology. Low oil prices will destroy a lot of things including technology, alternative energy, sustainability, and making the industry more attractive for people to join.”
Commenting on Brent prices, the minister said that the bets on a price recovery might be too optimistic. He added that the low price environment could govern markets for many more years.
“This is a man-made crisis and it is highly irresponsible,” Al Rumhy said.
Oman, the biggest Middle Eastern oil producer that is not a member of Opec, has long argued that Opec has lost several billions of dollars by not cutting production than if it had cut output and supported the prices.
Low oil prices are also deterring oil majors from investing into new projects, including in the Middle East.
The minister was speaking a panel discussion at the Abu Dhabi International Petroleum Exhibition and Conference (Adipec) which kicked off on Monday. The event runs until Thursday and over 2,000 exhibitors are participating.
Also speaking on the same panel was Tarek Al Molla, Egypt’s Minister of Petroleum and Mineral Resources, who said that Egypt was targeting a drop in subsidies to $8 billion this year.
“We have prioritised security, sustainability and governance, so we had to start addressing subsidies. The government has decided to start reforming subsidies over five years — whether for fuel or electricity,” Al Molla said.
“We started last year... and for fuels, we have been able to reduce the subsidy from $15 billion a year to about $9 billion this year. We are aiming this year to continue with the same plan, and we are hoping to reach $8 billion this year.”
Al Molla said that Egypt had seen an annual increase of 7-8 per cent in consumption whereas the country’s gross domestic product has been growing at around 4-5 per cent annually.
He added that the country was adopting new measures to encourage investment in the country, and has been studying and reforming its investment laws.
— With inputs from Reuters
