Oman Appoints Advisor for Crude Oil Storage

The government has appointed an advisor for the planned construction of a storage facility to hold 200 million barrels of crude oil at Duqm, a senior government official said here. "An advisor is doing a marketing study for the project undertaking, Nasser Al Jashmi, the undersecretary at the Ministry of Oil and Gas told Times of Oman.

"We have received interests from the region and internationally but we cannot name them or give you a project time scale until we have received a report from our advisor, Al Jashmi, who is also the chairman of Oman Oil Company, an investment arm of the government, added. Oman Oil Company earlier this month picked a 30 per cent stake in Oman Vale, a subsidiary of Brazil's Vale, the world's biggest producer of iron core. Experts say the crude oil storage will also serve as an energy reserve if the region is engaged in a conflict.

"Duqm is located away from the Strait of Hormuz and the huge oil reserve will supply Europe and the rest of the world if there is any short supply disruption. It is the regional producers which will fill up the storage to make it the most significant oil reserve in the world, Ian Sherman, a retired senior executive from oil giant Shell, told Times Business.

The strategic Strait of Hormuz, which is jointly overseen by Oman and Iran, is a transportation route for over 40 per cent of the world's crude oil. Iran has repeatedly warned it may close it down if either the United States or Israel attacks the Islamic republic. Oman is converting a quiet fishing village of Duqm into a major industrial town. The government is building an airport and a port as well as a 230,000 barrels per day refinery. The Sultanate currently produces 100 million cubic metres of gas per day and about 900,000 barrels of crude daily.