Oman LNG, the Sultanate’s primary liquefied natural gas (LNG) company, has reported a hefty increase in revenues for fiscal 2011, which jumped 26.5 per cent to $3.963 billion from $3.131 billion a year earlier.
Buoyant international energy prices averaging $101.68 per barrel in 2011 (versus $77.42 per barrel in 2010) contributed significantly to income growth, the company stated in its 2011 Annual Report issued here recently. Net income after tax also soared to $1.782 billion in 2011, entailing an increase of $400 million over the previous year’s net earnings.
“Our performance in 2011 demonstrates the sustainable robustness of our business proposition to our customers, shareholders, employees, suppliers and communities,” Dr Mohammed bin Hamad al Rumhy, Minister of Oil and Gas, and Chairman of the Board of Directors of Oman LNG, stated in the Chairman’s Report.
He further added: “The investment in Oman LNG has been a great success story from the first export cargo in 2000. This 12th annual report bears witness to this. The impact on revenues and the gross domestic product (GDP) of the country continues to be significant — second only to oil — and Oman LNG’s investment in Corporate Social Responsibility is now second to none in Oman. Its investment in the training and development of its own employees is also exemplary and makes it an employer of choice amongst young Omanis.”
In all, a total of 136 LNG cargoes were produced and delivered over the course of 2011 according to Oman LNG. Of this number, 87 were for Oman LNG and included two relief cargoes dispatched to Japan after the devastating earthquake and tsunami in March of last year. The remaining 49 cargoes were produced on behalf of its sister company, Qalhat LNG. In addition, 37 condensate cargoes were delivered on behalf of both LNG companies.
Significantly, Oman LNG’s creditable performance came against a number of international and domestic challenges, said Dr Al Rumhy. “Global markets’ uncertainties continued in 2011 with many fearing recessions in the developed economies spilling over into the emerging markets of Asia, South America and the Middle East.
The tragic earthquake and tsunami in Japan which led to overall economic decline in that country led to increased demand for liquefied natural gas (LNG) as its nuclear power generation was reduced to a fraction of installed capacity.
Against some predictions, emerging economies continued to grow and energy prices strengthened in 2011 to an average of over $100 per barrel compared to $77 per barrel in 2010.
At home, investment-led economic growth and rising expectations of a burgeoning young population in need of gainful employment brought three areas of significant challenge to the fore: gas supply, talent retention and meaningful employment opportunity creation.
The strategies adopted by the company in 2011 helped Oman LNG overcome these challenges, emerge stronger and ready to serve its customers, support its communities and add to shareholder value,” he said.
At the same time, rising domestic gas consumption presents a new set of challenges for Oman LNG, the Chairman pointed out. “As LNG export volumes have grown, so also has the domestic consumption of natural gas for power, industry and other strategically important commercial initiatives. Today, natural gas is central to meeting Oman's demand for power — which is growing by around five per cent per annum. To maintain oil production levels, Oman will need more energy intensive EOR (Enhanced Oil Recovery) technologies in the immediate future. The continuing diversification of Oman's industrial base and the drive to support Small and Medium Enterprises (SMEs) for employment creation require more gas.
“Not surprisingly, our government's priorities for natural gas have changed and any growth in LNG exports in the coming years will be a balance between meeting identified domestic needs and the incentives of foreign revenues which together are essential for sustaining the momentum of Oman's economic growth and diversification,” Dr Al Rumhy said.
Dr Brian Buckley, General Manager & CEO, described the outlook for the global LNG industry as “encouraging” despite recessionary fears in developed economies.
“The Middle East is experiencing rapidly growing populations and economies leading to steep rises in energy demands that are having to be met by natural gas imports, often in the form of LNG, and the diversion of oil for power. All these factors are driving the exploration and production of natural gas with greater determination than ever before in the region.
These global and regional developments offer Oman LNG unique opportunities to build upon its central role as a generator of significant wealth for Oman and as a leading investor in Oman's social infrastructure and people,” Dr Buckley stated in the Chief Executive's Summary.
Source: Oman Observer