Muscat performs tricky budget balancing act
12 December 2023

On 11 November, Oman’s Etco Space sent its first nano-satellite, Aman-1, into orbit aboard a SpaceX Falcon 9 rocket launched from California. It is the sort of endeavour Muscat is keen to promote as it tries to diversify its economy.
Etco Space chief executive Abdulaziz Jaafar said his company will be “pushing the boundaries of our space programme in the coming months and years”. It aims to launch more satellites and get involved in deep-space missions.
Oman’s economy needs to find new areas to exploit. GDP growth slowed from 4.3 per cent in 2022 to 1.3 per cent in 2023, according to the Washington-based IMF. The organisation expects the growth rate to revive to 2.7 per cent in 2024, but that is at least partly dependent on a rebound in hydrocarbons production.
This may not come to pass. Oman is part of the wider Opec+ arrangement to curb production and at the group’s meeting on 30 November, Oman agreed to cut 42,000 barrels a day (b/d) from its output during the first quarter of 2024. Opec said the cuts will be gradually unwound later in the year “subject to market conditions”.
Soft oil prices
It is not just about output, however. Oil prices have also been weaker in 2023. The Finance Ministry says Oman received $81 a barrel on average in the first nine months of 2023, compared to $94 in the same period last year.
Caroline Bain, chief commodities economist at Capital Economics, said the Opec+ cuts “should at least act as a floor under prices at current levels, but we would be surprised if it prompted a sustained price rally”.
As it stands, Oman’s net oil revenues were RO4.8bn ($12.5bn) in the first nine months of 2023, 10 per cent lower than a year ago.
Gas revenues have fallen even more significantly – by 42 per cent to RO1.6bn – prompting an overall drop in public revenues of 16 per cent, or RO1.7bn.
Wider market dynamics mean the pressure is likely to continue into 2024. Bhushan Bahree, executive director at S&P Global Commodity Insights, says that crude prices are “under pressure from a looming oil over-supply early next year”, amid strong oil production growth in the Americas.
The economic pressures follow a period of fairly benign conditions. High oil revenues in recent years have enabled Omani authorities to post fiscal and current account surpluses and pay off some sovereign debt.
Such trends have prompted the main credit ratings agencies to issue upgrades. In May 2023, Moody’s Investors Service promoted Oman from Ba3 to Ba2, while both Standard & Poor’s and Fitch Ratings upgraded the sovereign from BB to BB+ in September.
Debt and spending
Government debt rose from just 5 per cent of GDP in 2014 to a peak of 68 per cent in 2020, but since then there has been a concerted effort to reverse that trend. By 2022, it had dropped to 40 per cent of GDP and Fitch predicts it will stabilise at about 35 per cent in 2024-25.
Overall public debt is now at about RO16.3bn, levels last seen in 2018-19.
Despite the lower oil and gas revenues, the government has kept its spending discipline, with expenditure down 14 per cent in the first nine months of the year. This has meant the budget remains in surplus, albeit at lower levels than in 2022. Figures from the Finance Ministry show a surplus of RO791m for the first nine month of 2023, down from RO1.1bn in the same period a year earlier.
In the longer-term, Oman is pinning much of its hopes on hydrogen production. Hydrogen Oman (Hydrom) signed five deals for projects in Duqm in mid-2023, involving total potential investment of $30bn. It is hoping a second round of deals, covering blocks of land in the Dhofar region, could attract a further $20bn-$30bn, with awards due in early 2024.
Hydrom managing director Abdulaziz al-Shidhani has said total investments in the sector could reach $140bn by 2050, by which time the country is hoping to produce 8 million tonnes a year (t/y) of green hydrogen. There is an interim target of 1 million t/y by 2030.
Even if these investment and production targets are achieved, oil and gas will remain central elements of the Omani economy for some time. In a sign of the sector’s continuing importance, the $7bn OQ8 refinery project in Duqm is due to be completed by the end of 2023, with partners OQ and Kuwait Petroleum International aiming to process about 230,000 b/d of oil once it is up and running.
Compared to the undulations in oil and gas and the wider economy, Oman’s political scene is far more stable. Since taking over in 2020, Sultan Haitham bin Tariq al-Said has pushed economic reforms but made few changes on the political side, other than gradually adjusting some of the key personnel. In late October, he appointed new governors to take over in South Al-Batinah, North Al-Sharqiyah and Al-Wusta.
There have also been public protests in Muscat over the Gaza war, but they have been more limited than some other demonstrations in recent years, such as the protests against high unemployment and inflation seen in 2018 and 2019 in cities around the country.
As long as the government can keep the economy relatively stable, it should also be able to maintain the political equilibrium.
MEED's January 2024 special report on Oman also includes:
> BANKING: Omani banks look to projects for growth
> POWER & WATER: Oman expands grid connectivity

Exclusive from Meed
-
H&H continues to deliver Dubai projects29 October 2026
-
Riyadh Expo sets November bid deadline for Souq construction29 October 2026
-
Iraq oilfield water scheme to hit milestone next year29 October 2026
-
Dubai tenders Al-Awir sewerage and stormwater works29 October 2026
-
Contractors bid for QatarEnergy’s North Field West topsides28 October 2026
All of this is only 1% of what MEED.com has to offer
Subscribe now and unlock all the 153,671 articles on MEED.com
- All the latest news, data, and market intelligence across MENA at your fingerprints
- First-hand updates and inside information on projects, clients and competitors that matter to you
- 20 years' archive of information, data, and news for you to access at your convenience
- Strategize to succeed and minimise risks with timely analysis of current and future market trends
Related Articles
-
H&H continues to deliver Dubai projects29 October 2026

Dubai-based developer H&H has launched Water Gardens, a mixed-use development in Dubai International Financial Centre (DIFC), and expects to award most of the construction contracts for its wider pipeline before summer 2027.
Water Gardens comprises four buildings designed by UK architect David Chipperfield, arranged around a central garden and pedestrian-friendly public realm. The scheme combines offices, residences, hospitality and retail offerings, including the Four Seasons Private Residences Dubai at DIFC and residences under H&H’s Eden House brand.
Construction is under way, and the developer says the project is scheduled for completion in 2028. DIFC Investments describes it as one of the final components of the original Gate District masterplan.Speaking to MEED at the launch, H&H chairman Shahab Lutfi said the office building and Eden House are due for completion in about 18 months. The Four Seasons residences are scheduled for delivery at the end of 2028, with a five-star hotel following later.
Water Gardens is one of several projects H&H has under way. The company undertakes a selective portfolio of high-end real estate developments in prime locations in Dubai. These include the Carlyle Residences in DIFC; an Eden Hills villa community in Mohammed Bin Rashid City; and Dubai Peninsula, a waterfront scheme in the Jumeirah area that will include hotels operated by Aman and Rosewood.
“We are awarding day in, day out,” says Lutfi. “I think we are awarding most of our contracts from now until summer next year.”
Most of the company’s construction volume is in DIFC and Dubai Peninsula, with the Eden Hills villas accounting for a smaller share. Lutfi says H&H is talking to several of the emirate’s biggest contractors about upcoming packages.
We are awarding [contracts] day in, day out
Staged procurement
H&H is managing cost pressures by splitting up its procurement. It awards main contracts covering concrete works with a large number of provisional sums, then tenders further packages as designs are completed. “We are taking on some of the risk, but we know how to manage the risk instead of just offloading it on the contract,” says Lutfi.
He does not expect construction costs to fall in the next 12 months. Global inflation, driven by fuel prices and logistics costs, is already factored into the company’s plans.
“Waiting and trying to award at a cheaper price is not an option for us,” he says.
Lutfi says rising costs need not erode margins for developers that keep unsold stock to sell at higher prices later in a project. Developers that sell out early are more exposed. “If you have already sold out two years ago, you are hurting your profitability,” he says.
H&H is comfortable leaving 15%-20% of a project to sell on completion. The market usually expects developers to sell out before handover.
The company has not revised its masterplans or product mix in response to market conditions and continues to focus on large units.
Supply chains have been a challenge this year, but Lutfi says the company is over that hurdle. H&H has sourced more materials locally and planned logistics further in advance.
Materials are reaching Dubai through bonded routes from Oman, Fujairah and Khor Fakkan in the UAE, and Jeddah in Saudi Arabia.
“It takes a little bit longer, but at least things are coming in,” he says.
H&H relies on a relatively small group of contractors that work on most of its projects, and treats them as long-term partners.
Lutfi says contractors are attracted by the company’s financial stability and volume of work. “That can keep some people busy for the next five or six years,” he says.
Lutfi notes that sales in the Dubai market have dropped, although enquiries have picked up since the summer as buyers weigh whether it is the right time to purchase. The distressed sales that some had expected have not materialised.
“A 5% discount in some units is not really a distress sale,” he says. “It is just someone trying to get a discount because of the region’s situation, which actually builds confidence.”
For Water Gardens, H&H has sold 85% of Four Seasons Private Residences Dubai at DIFC since sales began in 2024. The company launched sales at the Carlyle Residences before the regional disruption and has since sold units one-to-one to selected clients. More Four Seasons units have been sold in the past two weeks.
“Branding makes a big difference,” says Lutfi.
The company markets its branded residences through a global network of brokers rather than via public campaigns or launch events. Eden Hills, which is aimed mainly at Dubai residents, is marketed more widely.
Lutfi expects buyers to be more cautious about buying off-plan. H&H is building new sales centres at Dubai Peninsula and in DIFC so that clients can see the product before they commit.
“People have to come in, know exactly what they are buying, and they will feel comfortable paying the price – instead of just having a pretty brochure,” he says.
He expects demand for villas to become more local and regional, while branded residences will continue to attract international buyers.
https://image.digitalinsightresearch.in/uploads/NewsArticle/21012636/main.gif -
Riyadh Expo sets November bid deadline for Souq construction29 October 2026

Expo 2030 Riyadh Company (ERC), responsible for delivering the Expo 2030 Riyadh venue, has allowed contractors until 11 November to submit bids for a contract to deliver the Souq areas within the Expo site.
The tender was floated on 30 July, with an initial submission deadline of 9 October.
The Souq areas are divided into five distinct precincts, with a total development area of about 300,000 square metres (sq m).
The scope includes the five precincts and their associated vertical elements, infrastructure and public realm works.
The precincts comprise:
- Precinct 1 – The Icon: 41,417 sq m
- Precinct 2 – Place & Planet: 62,306 sq m
- Precinct 3 – Culture of Wisdom: 67,112 sq m
- Precinct 4 – Kingdom of Saudi Arabia: 45,967 sq m
- Precinct 5 – Adaptation & Innovation: 82,358 sq m
The package will interface with three public parks. It will also tie into the Natural Corridor, including bridges.
The Souq areas will form a mixed-use destination at the centre of Expo 2030 Riyadh, connecting the site’s iconic and thematic assets.
The development will include rented and partnership pavilions, alongside a range of food and beverage, retail and visitor-experience offerings.
Site progress
Construction activity at the Expo site is accelerating, with Riyadh moving to award its first major vertical contracts and advancing infrastructure works across the programme.
Earlier this month, Saudi Arabia’s Royal Commission for Riyadh City awarded a design-and-build contract to build a new metro station serving the Expo 2030 site.
In April, ERC awarded two contracts to local firm Al-Yamama Company for the next phase of infrastructure works at the site.
The scope covered the construction of road networks and infrastructure for water, sewage, electricity, telecommunications and electric vehicle charging.
These awards followed ERC’s January award of an estimated SR1bn ($267m) contract for initial infrastructure works at the site to local firm Nesma & Partners.
That scope covered about 50 kilometres of integrated infrastructure networks, including internal roads and essential utilities such as water, sewage, electrical and communications systems, and electric vehicle charging stations.
The masterplan covers 6 square kilometres, making it one of the largest sites ever designated for a World Expo event. Situated to the north of the Saudi capital, the site will be located near the future King Salman International airport and will provide direct access to landmarks within Riyadh.
The Public Investment Fund, Saudi Arabia’s sovereign wealth vehicle, launched ERC – a wholly owned subsidiary – in June 2025 to build and operate facilities for Expo 2030.
https://image.digitalinsightresearch.in/uploads/NewsArticle/20998514/main.jpg -
Iraq oilfield water scheme to hit milestone next year29 October 2026

China Petroleum Pipeline Engineering (CPP) expects to start laying pipeline for Iraq’s Common Seawater Supply Project (CSSP) in Basra in mid- or late next year, according to industry sources.
The project is behind schedule, partly because importing sections of pipeline is proving challenging due to disruptions to shipping through the Strait of Hormuz.
The project is being managed by state-owned Basra Oil Company (BOC), with Australia’s ILF acting as a project management consultant after completing the front-end engineering design (feed).
Under current plans, the pipelines will be buried, which is expected to make them more secure than if they were installed on the surface.
Phased development
The client for the first phase of the CSSP is France’s TotalEnergies in partnership with QatarEnergy and BOC.
The first phase is split into two packages currently under execution and will ultimately have the capacity to transport 5 million barrels a day (b/d) of water.
The first package focuses on developing pipelines, and the second on developing a water treatment facility.
CPP is executing the pipeline package contract.
It signed a $2.5bn contract with BOC for the package in September last year.
Also in September 2025, South Korea’s Hyundai announced that it had signed a contract worth 4.39tn won ($3.16bn) for the processing plant package.
In September this year, MEED reported that early groundworks had started for both packages of the first phase of the CSSP.
Phase one of the project is scheduled to start up in late 2028 or early 2029.
Earlier this month, US-headquartered Exxon Mobil signed a memorandum of understanding related to the project’s second phase, which is expected to add 2.5 million b/d of water capacity.
The CSSP will inject processed water into several of Iraq’s biggest oil fields. These include Rumaila, Zubair, West Qurna 1, West Qurna 2 and Majnoon. Water from the project will also be used in the Maysan and Dhi Qar fields.
https://image.digitalinsightresearch.in/uploads/NewsArticle/20981033/main.jpg -
Dubai tenders Al-Awir sewerage and stormwater works29 October 2026

Dubai Municipality has invited contractors to bid for a contract to build sewerage and stormwater infrastructure in New Al-Awir 1st.
The project (DS317-C1) comprises about 95 kilometres of sewerage gravity network, excluding house connections, and about 105km of stormwater pipelines. The scope also includes house connection pipes, a stormwater pond and oil interceptors.
According to tender documents seen by MEED, the tender was issued on 23 October, with a bid submission deadline of 12 November.
The project comes amid wider residential and infrastructure development in Al-Awir 1. In January 2025, Dubai’s Roads & Transport Authority (RTA) announced plans to build 16.5km of internal roads in the area, including a new entrance from Emirates Road.
In February 2025, MEED exclusively reported that the RTA had selected a local firm to undertake the road construction works.
The Mohammed Bin Rashid Housing Establishment has also reported progress on housing projects in Al-Awir as part of a wider programme to develop residential communities across Dubai.
The sewerage and stormwater project is relatively large compared with recent stormwater tenders, with the total cost estimated at up to AED1bn ($272m).
The works will include approximately 69.2km of house connection pipes and 4,630 inspection chambers. The sewerage network will also include about 1,511 manholes, while the stormwater network will comprise approximately 1,247 manholes.
Contractors will also be required to use no-dig construction methods for sections of the pipeline. The scope includes ground investigations, utility protection and traffic management.
The bill of quantities specifies a stormwater pond with a composite volume of approximately 1.2 million cubic metres.
Earlier this week, Dubai Municipality confirmed it had awarded contracts worth AED3bn ($817m) to expand the emirate’s stormwater drainage network by about 100 square kilometres under phase three of the Tasreef programme.
The projects are part of Dubai’s AED30bn Tasreef programme and will cover Jumeirah, Umm Suqeim, Al-Quoz, Al-Barsha, Al-Wasl and Al-Marmoom.
The overall programme aims to increase the emirate’s stormwater drainage capacity by 700% and reduce costs associated with pumping stations, network operations and maintenance by 20%.
https://image.digitalinsightresearch.in/uploads/NewsArticle/20977734/main.jpg -
Contractors bid for QatarEnergy’s North Field West topsides28 October 2026

QatarEnergy has received technical bids from contractors for a key tender covering the engineering, procurement, construction and installation (EPCI) of large platforms for the North Field gas field in Qatari waters.
Contractors submitted their technical bids by the 26 October deadline, according to sources.
Commercial bids are currently due on 10 November.
The following contractors, among others, are understood to be bidding for the North Field West (NFW) production deck modules (PDMs) tender:
- China Offshore Oil Engineering Company (China)
- Larsen & Toubro Energy Hydrocarbon (India)
- McDermott (US)
- Saipem (Italy)
The core scope comprises the EPCI of four PDMs and associated structures. The modules will increase gas production from North Field reservoirs and supply additional gas feedstock to the NFW liquefied natural gas (LNG) development.
Issued earlier this year, the tender forms part of the wider NFW project, the third and final phase of QatarEnergy’s North Field LNG expansion programme.
The technical-bid deadline has been extended several times, from 30 August to 15 September, 28 September, 12 October and 19 October. Commercial bids were previously due on 25 October, as MEED reported.
Before issuing the PDMs tender, QatarEnergy awarded US firm McDermott an EPCI contract for four offshore jackets to support gas feedstock supply for the NFW LNG project. The contract is estimated to be worth about $200m, MEED reported in January.
North Field LNG expansion
QatarEnergy is advancing the three phases of its estimated $40bn North Field LNG expansion project. EPC works on all three projects are progressing.
QatarEnergy is understood to have committed nearly $30bn to the first two phases – North Field East (NFE) and North Field South (NFS) – which will lift Qatar’s LNG production capacity from 77.5 million tonnes a year (t/y) to 126 million t/y by 2028.
QatarEnergy awarded the main EPC contracts for NFE in 2021. The project was intended to raise LNG output to 110 million t/y by 2025. The $13bn EPC package – covering the EPCI of four LNG trains, each with a capacity of 8 million t/y – was awarded in February 2021 to a consortium of Japan’s Chiyoda and France’s Technip Energies.
In May 2023, QatarEnergy awarded the $10bn main EPC contract for NFS to a consortium of Technip Energies and Consolidated Contractors Company (CCC). The contract includes two LNG trains, each with a capacity of 7.8 million t/y.
Once fully operational, the first two phases are expected to add 48 million t/y of LNG supply to the global market.
QatarEnergy took the final investment decision on NFW earlier this year, awarding an EPC contract estimated at $8bn to a joint venture comprising Technip Energies, CCC and Gulf Asia Contracting in February.
Chiyoda carried out the front-end engineering and design work for the NFW LNG project.
The NFW scope covers the EPC of two LNG trains with a combined capacity of 16 million t/y, as well as associated facilities for gas treatment, natural gas liquids recovery and helium extraction.
In addition to LNG, NFW is expected to produce about 175,000 barrels of oil equivalent a day of condensate, ethane and liquefied petroleum gas.
With all three phases under EPC execution – and NFE scheduled for commissioning later this year – QatarEnergy is positioning itself to remain one of the world’s largest LNG suppliers in the long term.
https://image.digitalinsightresearch.in/uploads/NewsArticle/20973187/main.jpg