Duqm Refinery has achieved full finance on its path to becoming a driver in Oman’s economic diversification.
One of Oman’s economic objectives is to diversify its income, and the strategies include adding value to raw materials, leverage its geographical location and maximize local manpower skill sets.
The new “Duqm Refinery” at Ras Markaz on the East Coast of Central Oman manages to combine all three. The refinery will maximize the income from Oman’s own oil production, and conveniently it’s located at a centre point of Oman’s major Oil production areas in southern and northern Oman. Doubtless, it will also be able to handle imported Oil as the refinery itself is able to handle a range of different Oil types. The capacity is anticipated at 230,000 barrels per day, 25% of Oman’s Oil production, suggesting that either a substantial proportion of Oman’s oil will be allocated here or, as with Gas, imports will play a major role.
The financing of this project is achieved by a USD4.61 billion loan. The owners of the facility, Oman Oil Company and Kuwait Petroleum International sourced the loans internationally – with a 32% coming from Kuwaiti banks, 11% from Omani bank and the balance from wider sources.
The confidence in achieving the financial loans is demonstrated by contracts being signed for construction in February 2018 with major companies including Daewoo, who was involved in Duqm’s original port development.
مجلس إدارة مشروع مصفاة الدقم والصناعات البتروكيماوية يعلن عن تعيين الدكتور سالم بن سيف الهذيلي رئيسا تنفيذيا للمشروع
The Board of Directors of Duqm Refinery announced the appointment of Dr. Salim Saif Al Huthaili as a Chief Executive Officer of Duqm Refinery pic.twitter.com/z2eOwfR6CS
— مصفاة الدقم (@Duqm_Refinery) December 5, 2018
The geographic location is a natural part of Oman’s location on shipping lanes to major energy consumption areas in Asia, Africa and Europe. Ras Markaz with its relatively sheltered location on the Arabian Sea is doubtless well placed to make use of the locational advantage.
The appointment of Dr Salim Al Huthaili as CEO is another demonstration that the long-term ambition of the Oman Government to achieve maxim use of local manpower is being realised. With part ownership by Oman Oil, who it was announced will merge with ORPIC, the role of a small German Based company as an incubator for senior oil officials in Oman is highlighted as Dr Salim Al Huthaili was chief executive officer at OXEA.
Mr. Musab Al Mahruqi who is the CEO of the joint entity being formed by Oman Oil and ORPIC was previously the Chairman of OXEA, that itself is owned by Oman Oil. Both Musab Al Mahruqi and Dr Salim Al Huthaili are graduates of engineering at Nottingham University England.
Clearly, Nottingham and OXEA are places to go to become players in Oman’s future.