The Impact of Low Oil prices on the GCC Economies Im… · Crude Oil: Proved Reserves (at end 2014) Country Share of World Total Reserves/Production ratio (years) Venezuela 17.5 %

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Hatim Al-SHANFARI

Aman Union 6th Annual Meeting

7 December 2015

The Impact of Low Oil prices on the

GCC Economies

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Outline of the Presentation

Global Energy Outlook

GCC Economic Outlook

Oman Economic Outlook

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

6Source: 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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GCC Economic Outlook

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18Source: IMF

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Key Questions for the Scenarios

Q1- Will leaders in the GCC countries be willing

and able to implement the necessary economic

and political reforms and enforce the rule of law,

both in public and private governance?

Q2 – How can the GCC countries maintain

internal order and stability, in particular vis-

a-via a complex and uncertain regional

situation?Source: World Economic Forum - 2007

26Source: World Economic Forum - 2007

Oman Economic Outlook

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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 14,016

Commercial Banks

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

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

28Source: National Centre for Statistics & Information, CBO, and IMF

Key Variables for Oman

Oil & Gas Sector: production and prices

Population Trend

Regional Opportunities

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Oman: Proved Reserves (at end 2014)

Share of World Total Reserves/Production ratio

(years)

Crude Oil 0.3 % 15

Natural Gas 0.4 % 24

Source: BP Statistical Review of World Energy June 2015

Total Omani Population- Million

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Year Size

2015 2.3

2020 2.6

2030 3.2

2040 3.8

Regional Opportunities for Oman

Regional Opportunities – Population (million)

Country 2015 2005

India 1,303 1,134

Pakistan 191 158

Iran 79 69

Kenya 46 36

Tanzania 49 39

Ethiopia 101 79

Total 1.8 Billion 1.5 Billion

Source: United National Development Program [UNDP] – Human Development Reports

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The Fertile Oman

Higher oil and Gas prices and production

Oil Price around $ 100 /BBL

Oil Production around one Million BBL

High diversity of the Economy

Low unemployment

Knowledge Economy

Higher Regional Opportunities

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Oasis

Current Oil and Gas prices and production

Oil Price around $ 60 /BBL

Oil Production around one Million BBL

Current level of diversity

Current rate of Unemployment

Current state of Knowledge-based Economy

Moderate Regional Opportunities

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Sandstorm Low oil and Gas prices and production

Oil Price around $ 20 /BBL

Oil Production around 0.5 Million BBL

Low level of diversity

High unemployment

Less competitiveness

Less Regional Opportunities

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How can Oman builds on

its current strength, while

overcoming the internal

and external pressures

that could shift it from the

path of sustainable

development?

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The Way Forward for Oman

In the past success was based on two main

factors:

Good leadership and governance

Natural / Inherited wealth

For the future:

Good leadership and governance

Education and Training

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The Way Forward for Oman

The future is:

Highly unpredictable

Highly competitive

High expectation of the Youth

More regional opportunities

What we need to have:

More flexibility / adaptive to changes

Less bureaucracy

High quality education and training

More productivity

Smart investment

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Thank you