In oil and gas circles it’s fairly common to hear about Oman in the context of fighting declining reserves, and experimental enhanced recovery techniques. However, the balance of conversation may soon start shifting towards the entrepreneurial start-ups in the country.
With the cost of doing business everywhere in the Gulf rising, the fact that Oman’s commercial development has been less rapid than elsewhere means costs are still much lower than in neighbouring Saudi Arabia and the UAE.
Lower rents for commercial property and greater ease of finding affordable housing for staff makes the Sultanate an attractive prospect for companies entering the regional market. Indeed, facilities in the UAE are running at such a premium that firms already based in Dubai and Abu Dhabi are looking to up sticks and find a lower cost environment, in spite of the inertia costs involved.
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A recent visit to Salalah showed that early movers Octal have made major steps towards making this a reality. On a huge greenfield site, adjacent to the rapidly expanding Port of Salalah, a new PET resin and sheet factory is taking shape and dominating the horizon for miles around.
Octal have moved first, but the scale of the development will propel the port town to the front of the international PET scene in an instant. The company had its first facility up and running in six months, and its initial capacity of 30,000 tonnes of PET sheet immediately sold out. The new facility is set to open later this year, and will come on stream with a further 300,000 tonnes of resin and sheet production.
The advent of a dynamic downstream sector will see much more of the value added hydrocarbon business flow to Oman’s shores, and now that basic infrastructure and common facilities have been installed, barriers to business are falling away.
A pleasant climate and stunning scenery are of course just a bonus. Firms holding back from expansion in the Middle East because of spiralling costs would do well to fly south this summer.
Daniel Canty is the editor of Oil & Gas Middle East.
