Oman aims to strengthen its food security by investing in the agricultural sector of Belarus.

H E Sergei Rachkov, Ambassador of Belarus to Egypt and Non-Resident Ambassador to Oman,

Algeria and Sudan, said, “One of Oman’s key tasks is to strengthen its food security. Oman is showing a lot of interest in the Belarusian agricultural sector in order to invest and get the most out of it in the form of food products that can be supplied to even its neighbouring countries.”

Oman is also interested in the mechanical engineering industry (trucks and passenger transport) and fertilisers from Belarus. “We have a well-developed science sector. We can share a lot. The Omani Research Council is interested in a number of projects. We have submitted 49 projects to the council for consideration. We expect the council will say which projects it chooses in the near future,” H E Rachkov said.

A business delegation led by Said bin Saleh al Kiyumi, chairman of the Oman Chamber of Commerce and Industry (OCCI) visited Belarus last week.

The businessmen visited a number of Belarusian enterprises, including Amkodor (a leading company for the production of special purpose machinery), and discussed possible cooperation, in particular, the opening of a joint Belarus-Oman enterprise for delivering Belarusian machinery to Oman.

Oman’s new foreign investment and labour laws will seek to address all concerns raised by potential foreign investors and help improve the business environment, said a top official at Ministry of Commerce and Industry (MoCI). He said the laws are likely to be ready by this year-end. Mohsen bin Khamis al Balushi, adviser at the ministry, told the Observer that these new laws, which have been finalised, are due to joint efforts between the government and the private sector. “It will reflect all the measures required to deal with the current economic situation and focus on ease of doing business in Oman.”

Oman is ranked 70th for ease of doing business, but much lower to the neighbouring UAE (30). It’s in close race with Bahrain (65), Qatar (68) and way ahead of Saudi Arabia (82) and Kuwait (101). He said it will be not possible to share details, but stressed that the new laws will be far more flexible for a better investment environment in the country. Talking in the backdrop of Indian businessmen currently visiting Oman, Al Balushi said investors should see Oman not only as an export market, but should use it as a platform to target neighbouring countries like East Africa, Iran and other countries in the region. Al Balushi said most of the provisions of the current investment law still exist. “Let us wait for the new one to happen.”

Oman is planning to sell more of the dollar-denominated bonds it issued in June, according to two people with knowledge of the deal, as the Gulf nation looks to shore up state finances pressured by low energy prices.

The potential tap of bonds due 2021 and 2026 will be of benchmark size, the people said, asking not to be identified as the information isn’t public. The sultanate issued $2.5 billion in June; benchmark typically means at least $500 million. The sale may come as soon as this month, one of the people said.

Any fresh debt would be the latest in a series of issues by the largest Arab oil producer that’s not an OPEC member. Oman, rated one level above junk by S&P Global Ratings, borrowed $1 billion through international loans at the start of 2016 and also privately placed dollar-denominated Islamic bonds, people with knowledge of the matter said at the time.

The Sultanate registered a year-on-year (CPI-based) inflation rate of 1.34 per cent for August, driven mainly by a 7.25 per cent rise in prices in the transport set, and a 0.83 per cent rise in the housing, water, electricity, gas and other fuels set, according to the latest report by the National Centre for Statistics & Information (NCSI).

Foods & non-alcoholic beverages prices went down by 1.12 per cent, while tobacco prices rose by 0.38 per cent in August compared with the same month last year. Clothing and footwear fell by 0.61 per cent, while Furnishings, household equipment & routine household maintenance went up by 0.61 per cent.

Health prices increased by 0.94 per cent. Education registered a rise of 3.03 per cent and communication prices on the other hand declined by 0.26 per cent. Recreation and culture fell by 0.46 per cent, while restaurants and hotels set saw prices fall by 0.26 per cent. Miscellaneous goods and services logged a price rise of 0.51 per cent in the month of August as compared with last year.

Kunooz Oman Holding, a leading player in the Sultanate’s mining, quarrying, transportation and construction materials sectors, has acquired a 20 per cent stake in Associated Industries Limited SFZ, an Indian-owned company that operates a roughly 120,000 tonnes per annum capacity lime calcination plant in Salalah Free Zone.
The acquisition is set to further strengthen Kunooz Oman’s credentials as a major player in the manufacture and export of calcined lime — a key ingredient in the production of steel, among other applications. It also comes ahead of Kunooz Oman’s eagerly awaited Initial Public Offering (IPO) on the Muscat Securities Market (MSM), slated during May-June 2017. Kunooz Oman’s associate company, Carmeuse Majan, already operates a lime calcination plant in Salalah Free Zone — a project set up in partnership with Belgium-based Carmeuse Holdings SA, one of the world’s largest producers of lime and related products. With the acquisition of a stake in Associated Industrial Limited, located adjacent to its facilities in the free zone, Kunooz is set to cement its position as a formidable player in the lime export business.
Speaking to the Observer, Kunooz Oman Holding CEO Dean Cunningham described the group’s investment in Associated Industries Limited (AIL) as “substantial”. “We now own roughly 22.05 per cent of AIL, and we are looking at increasing (this figure).”
The acquisition also has significant beneficial implications for Carmeuse Majan’s operations, as well as to the Sultanate’s strategic economic goals, Cunningham noted.

Oman’s capital city has been ranked in ninth place worldwide in the ‘Social Sustainability’ category in the Arcadis ‘Sustainable cities index report 2016’.

Muscat is ranked high in the ‘People sub-index’ and is also the only city in the Middle East that was ranked in the top ten globally.

The People sub-index measures social sustainability, in which Muscat ranks high, in terms of low income inequality, demographics, excellent work-life balance, affordability and low crime rates, making it one of the most socially sustainable cities in the world.

The Index ranks the leading 100 cities in the world based upon three parameters: People, Planet and Profit sub-indexes. This measures quality of life, captures green factors, such as energy pollution and emissions, and assesses the business environment and economic health of the city.

Joe Wright, a tourist from South Africa, he said he was surprised that Muscat was not ranked higher in quality of life. “I feel it is an excellent place to live. Friendly people, excellent environment, low crime rates and affordable luxuries, all make Muscat a great place to live in,” he noted. He also mentioned that he hopes to work in Oman in the future.

A major study conducted by Oman government on developing industrial sector has recommended for five significant investment opportunities to exploit available natural resources in the Sultanate.

The study, jointly conducted by the Ministry of Commerce and Industry and the Gulf Organisation for Industrial Consulting, suggested ways to eliminate exports of raw materials and add value for export items.

The consultants also reviewed the most commonly used products in the Sultanate that are not locally produced, as also the locally manufactured products, which are insufficient to meet market needs. Moreover, the factors that force the country to rely on imports were also studied, according to a press release.

Duqm has the potential to become an export hub for oil and there are advantages in sending oil directly from Saudi Arabia to the Omani port by pipeline, said Shell Country Chairman Chris Breeze.

On the business opportunities he saw with work in progress on the $400-million Ras Al Markaz crude storage park near Duqm, he said: “If you are talking pipelines and shipping oil, you should consider the scope for Duqm being an export hub for Saudi oil, which then would not have to go through the Strait of Hormuz and would not have to go by the Arabian Gulf, but directly by pipeline across to Duqm and it could become a major export hub for Saudi oil”.

Shell looks at “all opportunities in a keen way and where we can develop business with our Omani partners we certainly do that,” he told Oman Tribune during a recent event where Shell Intilaaqah and Riyada announced new programmes for SMEs.

The Ras Al Markaz storage facility will ensure availability of crude to the nearby 230,000bpd Duqm refinery when it becomes operational and could encourage the setting up of other refineries in the Sultanate and the region when it expands. With the facility of storage, companies that operate both downstream and upstream will have the option of buying crude when it is priced low, storing it and then selling it or its refined products when prices are higher. HE Dr Mohammed Bin Hamad Al Rumhy Minister of Oil and Gas minister has already announced that international companies had shown their interest in the project.

Ras Al Markaz will have an initial capacity of up to 10 million barrels that could be raised to 200 million barrels. Expansion will continue with demand and the ambition is to become one of the largest oil storage hubs in the world.

The world economic conditions resulting from the oil price drop at the second half of 2014 have significant effect on the economic decisions in the various countries of the world in general and on countries of the region in particular. This is due to the fact that oil is the main source of public revenues and the mainstay of economy in the GCC states. The Sultanate is not insulated from such effects, therefore it sought on one hand to address the implications of the financial crisis on the national economy as far as possible and on the other to develop a roadmap that can make the Sultanate more capable of resisting and acclimatising with the fluctuation of world economy.
Taking into consideration its methodology, aims and objectives, it can be assumed that the 9th five-year plan is the outcome of the hard economic stage faced during the last two years of the 8th five-year plan. The 9th five-year plan reflected the hard implications of oil price slump and the pressure created on the state budget and the Sultanate’s economy while drafting this plan. There are several strong factors that urged for developing a crystal clear development plan with measurable goals and clear time plans for implementation. It also required developing a concentrated plan that can provide necessary means capable of protecting the national economy against the shocks resulting from oil market fluctuation.

Oman’s micro business units, which do not come under voluntary threshold limit for value added tax (VAT) registration, will be in a disadvantageous position once the government introduces the new tax scheme by January 2018.

This is due to the fact that where a supplier is not VAT registered, then the VAT amount on their inputs is not recoverable and this additional cost becomes embedded in the price of their supplies and is not recoverable by their customers, according to top-level officials of KPMG, who addressed a seminar on VAT implementation road map here on Monday.

The United Arab Emirates (UAE) said that mandatory VAT threshold limit for business enterprises is fixed at $1 million (equivalent to OMR385,000), while voluntary registration is for companies with an annual turnover in the range of OMR192,500 and OMR385,000. Oman is likely to follow the same threshold limit as all GCC states will have to agree on certain frameworks.

“If you buy (goods and services) from a registered business, you can recover VAT amount (paid by your supplier),” said Rob DallaCasta, VAT leader, KPMG in the Lower Middle East. The companies, which are not registered, also will have to pay VAT component, which will increase the cost as the company cannot claim for reimbursement. “So, the cost structure will go up and therefore, companies prefer to deal with businesses that are registered for VAT.”



GE Oil & Gas has signed a landmark long-term, multi-million-dollar contract with Petroleum Development Oman (PDO) for the provision of Progressive Cavity Pump equipment (PCP) and related services commencing in the third quarter of 2016.

This is aligned with PDO’s ‘In Country Value’ initiative and marks the first contract awarded by PDO to GE, for providing PCP equipment and services.

PDO’s ‘In Country Value’ strategy aims at promoting localised sourcing, developing Local Community Contractors (LCCs) and strengthening Omani talent development through training programmes.

A proposal to develop a separate bourse for small and medium industries is getting delayed due to the ongoing economic slowdown and the consequent sluggish trend in the secondary market.

The Muscat Securities Market (MSM) came up with a plan to develop an exchange exclusively for small and medium firms almost two years ago in line with successful SME markets in the world.

“The project has slowed down now. We will see the market conditions and (wait for) a recovery in oil prices (to proceed with the plan). The current market condition is not conducive (for developing such a bourse),” Sheikh Abdullah Salem Al Salmi, executive president of the Capital Market Authority, told the Times of Oman.

Oman has over 90,000 small and medium units, which collectively contribute 13-14 per cent of the country’s gross domestic product (GDP).

Al Salmi said a Taiwanese agency had conducted a feasibility study for an exchange model for small and medium enterprises in Oman. “It requires certain elements to be in place.” The market has to take into account certain legal issues for developing a separate market for small and medium industries.However, he said that the idea has not yet been scrapped.

Oman Development Bank (ODB) financed 53,482 projects with a total value of OMR424.68 million from January 1997 till the end of June 2016, representing a staggering growth rate of 749 per cent.

While the annual rate of the projects funded by ODB is estimated to be 2,674 projects, the annual average value of funds invested is OMR21.23 million representing an annual growth of 39 per cent.

Oman Development Bank provides finance for a variety of projects in many value-added productive sectors that ensure food security and help increase economic growth in sectors, such as fisheries, agriculture, industry, tourism, education, health and tourism.

The great efforts made by ODB throughout these years have been supported and contributed to by the government’s attitude and the five-year plans aimed at achieving economic diversification.

Productive sectors

Raysut Cement on Wednesday said that its gas supply station at its plant in Salalah has been commissioned and commercial operation has already been started. This will enable the company to increase the production capacity of cement to 130,000 to 140,000 tonnes of cement per annum, which will lead to increase the company`s profitability, according to a disclosure statement posted on MSM website.

Raysut Cement in its first half result said that its project with Barwaaqo Cement Company in Somaliland, Berbara is also progressing. The construction of Duqm terminal is completed and currently the parent company is processing all necessary formalities and commercial operation is expected within third quarter of 2016.

Also, the civil work for the new packing plant in Salalah started and expecting to commission the plant by end of October 2016.

Gulf Mining Group, one of the largest mining and mineral processing corporations in the Sultanate, has plans to set up a major potash mining project targeting prolific reserves in central Oman.
According to the Group’s Chief Executive Officer, Mohammed Yahya al Shabibi , initial investments in the project are estimated at between $300 — 500 million, effectively making it the single largest mining related venture in the Sultanate.
“We have joined hands with international investors — whose identities I cannot reveal at this stage — as strategic partners in the development of potash mines in central Oman,” Al Shabibi said. “Omani wealth funds have also indicated interest in participating, while local banks are planning a syndication to support the financing,” the CEO added in exclusive comments to the Observer.
The initiative comes against a backdrop of heightened efforts by the Omani government to accelerate the development of the nation’s prodigious mineral resources in support of its economic diversification goals. Mining has been identified as one of five strategic non-oil sectors, alongside manufacturing, tourism, fishing and logistics, that have been targeted for aggressive development towards this end.

Al Hadeetha Resources, a 70:30 joint venture between Australia-based Alara Resources and Al Hadeetha Investment Services, plans to start commercial production of copper concentrate by the first quarter of 2018 from its copper-gold mine at Washihi, around 160 kilometres south-east of Muscat. However, it is subject to the company getting a mining licence from the Public Authority for Mining.

The company plans to award a contract for developing the mine and building a copper concentration plant after getting the licence. “Construction of the copper concentration plant will take 12 months, after awarding the contract,”Justin Richard, chief executive officer of Alara Resources, told Times of Oman.

The company anticipates a copper concentration production to the tune of 30,000 tonnes per annum, from as much as one million ore.

“The feasibility study was based on exporting the concentrate. But there is an option to sell it in Oman. Oman has a copper smelter, but it is not operational now.

Oman’s SME Development Fund (SMEF) has raised OMR20 million corpus in two tranches so far, out of its total envisaged corpus of OMR100 million. Also, the fund has financed 160 projects by deploying OMR15.8 million, which indicates an average funding size of OMR100,000 per project, according to a top-level official of SME Development Fund.

Apart from providing leasing, project finance and working capital to SMEs, the fund also supports them through their nurturing programme, comprising accounting support, monitoring, free software support and mentoring services. KPMG and BDO have been contracted to provide these services at the best international standards, Raphael Parambi, chief executive officer of SME Development Fund, told Times of Oman. Eligible SMEs benefit from interest subsidies, which are provided by SMEF through a grant through the country’s offset programme.

Scottish based international oil and gas technology agency, The Industry Technology Facilitator (ITF), together with Energie Beheer Nederland (EBN) and Petroleum Development Oman (PDO), have launched a joint industry project (JIP) which will reduce time and costs for oil producers to determine whether gas fields are economically viable.
The PETGAS III (Petrophysics of Tight Gas Sandstones) project is the continuation of the successful work being conducted by the University of Leeds in examining the petrophysical properties of tight gas sandstones. A robust database of key petrophysical properties has been formed to make rapid estimates of the properties of unknown samples based on their microstructure. Its specialist software, PETMiner, has been developed to visualise this and other petrophysical properties data.
The database of the petrophysical properties of tight gas sandstones will be used to improve the interpretation of wire-line log data for the characterisation of tight reservoirs during exploration, appraisal and production. The project remains open to late participants.
Professor Quentin Fisher of the University ofLeeds, the project’s principal researcher, said, “When oil producers are developing low-permeability objectives, the petrophysical properties largely determine whether gas fields are economically viable. Current methods used in the industry are both expensive and time consuming.

Oman’s two leading pension funds have decided to invest a total of 20 per cent in the new Crowne Plaza hotel, which is under development as part of the first phase of the Madinat Al Irfan Urban Centre.

State-owned Oman Tourism Development Company (Omran), the master developer of the Madinat Al Irfan Urban Centre project in Muscat, said its initial Private Placement Memorandum (PPM) agreement for the development has been a successful first stage of its public-private sector partnership approach.

Both the funds — the Public Authority for Social Insurance and the Sultan Special Force pension — demonstrated an interest in participation in phase one of Madinat Al Irfan, and when offered the Crowne Plaza proposition both chose to invest, taking a total of 20 per cent of the purchase between them, according to a press release from Omran.

The Crowne Plaza at the Oman Convention and Exhibition Centre (OCEC), which is on track to open in 2017, was one of several assets offered for investment in response to private sector interest in involvement with phase one of the Madinat Al Irfan development.

“We had indicated an interest in investing in the major developments Omran and the Ministry of Tourism was planning, so the offer of an investment in the initial phase of Madinat Al Irfan was an attractive one. The investment proposition was low risk because Omran had done a lot of the development work already, including the award of contract and the financing, so this was a robust choice for us to participate in the flagship project,” said Sheikh Ghasan Khamis Al Hashar, Investment Director of Public Authority of Social Insurance.

Orpic, the Sultanate’s refining and petrochemicals flagship, plans to develop its high-tech fuel storage and distribution terminal at Al Jifnain on the outskirts of Muscat Governorate, into a national strategic reserve in the next phase of its expansion.
According to a high-level executive of Orpic Logistics, the joint venture set up by Orpic with Spanish fuel logistics specialist Compañía Logística de Hidrocarburos (CLH), the move is key to ensuring security of fuel supply across the nation.
The state-of-the-art terminal is the centerpiece of Orpic’s USD 320 million Muscat-Sohar Product Pipeline (MSPP) project designed to support the establishment of modern fuel storage and distribution infrastructure in the Sultanate. Currently under construction with a capacity to hold 172,000 m³ of refined products, the new terminal will increase the storage capacity of fuels by 70 per cent — a step that will also provide alternatives for securing fuel supply to the population in the event of a disruption.
Significantly, additional storage capacity is envisioned in the next phase of the project’s development, said Andre Suarez (pictured), General Manager — Orpic Logistics.
“As a second phase, Orpic Logistics is studying the construction of 1,000,000 m³ of additional storage capacity at Al Jifnain for starting the development of national strategic reserves. This volume is equivalent to more than 30 days of oil products consumption and would further increase the security of supply to the population,” he stated.
According to the executive, the MSPP project represents Orpic’s response to the strategic objectives set by the government for developing oil products logistics activities in the Sultanate.