Oil & Gas

Oman’s Sultan Haitham bin Tariq has emphasized the need to prioritize renewable energy as a cornerstone of the country’s economic diversification strategy.

In his National Day speech in November, he highlighted renewables as more than an environmental solution, describing them as a way of life essential to securing Oman’s future and ensuring long-term national prosperity.

While Oman remains an exporter of liquefied natural gas and crude oil, its hydrocarbon reserves are relatively limited compared to most GCC countries, except Bahrain. To address this, the sultanate is focusing on its strong solar potential to support green hydrogen production, although challenges such as high transport costs and evolving regulatory frameworks continue to pose constraints.

In support of this transition, state-owned Energy Development Oman (EDO) secured a $1 billion loan in October to expand its renewable energy portfolio. EDO, through its subsidiary Hydrogen Oman (Hydrom), is investing $20 billion in green hydrogen projects and aims to boost production by 20 percent to 1.4 million tonnes annually by 2030. Although early bidding rounds in 2022 and 2023 attracted limited investor interest, a third round is now underway after terms were revised.

Industry leaders see the shift to renewables as a strategic transformation for Oman. Essam Al Sheibany of Asyad Group noted that renewable energy would strengthen energy security by reducing dependence on a single fuel source, freeing up natural gas for industry or export, and stabilizing long-term power supply.

Major projects are concentrated in the Sohar, Salalah, and Duqm free zones, including the $8 billion HyDuqm green hydrogen project, while experts such as Strataphy CEO Ammar Alali suggest Oman could hold some of the world’s largest and most accessible geological hydrogen reserves.