G/STR/N/10/OMN, G/STR/N/11/OMN  
G/STR/N/12/OMN, G/STR/N/13/OMN  
G/STR/N/14/OMN, G/STR/N/15/OMN  
 
13 August 2014  
(14-4687)  Page: 1/5  
Working Party on State Trading Enterprises  Original: English  
 
 STATE TRADING 
NEW AND FULL NOTIFICATION PURSUANT TO ARTICLE XVII:4(A) OF THE  
GATT 1994 AND PARAGRAPH 1 OF THE UNDERSTANDING ON  
THE INTERPRETATION OF ARTICLE XVII 
OMAN 
The following communication, dated 1 August 2014, is being circulated at the request of the 
Delegation of Oman. 
 
_______________ 
 
 
The Public Authority for stores and Food Reserves (PASFR) is not a state-trading enterprise in terms of the definition in Article XVII of GA TT 1994 and Understanding on Interpretation of 
Article XVII, as it has not been granted any exclusive or special rights or privileges in its purchases 
or sales involving either imports or exports.  However, without prejudice to Oman's position, the following information in respect of PASFR 
being furnished to the WTO. 
 1  ENUMERATION OF STATE TRADING ENTERPRISES 
The Public Authority for stores and Food Reserves (PASFR) is responsible for maintaining reserve 
of rice, sugar, milk powder, tea, wheat, lentil and edible oil.  
2  REASONS AND PURPOSE FOR THE FORMATION AND MAINTAINING OF PASFR 
The PASFR was established in 1980 to maintain strategic food reserves to meet the essential 
requirements of population in an emergency.  
3  DESCRIPTION OF FUNCTIONING OF PASFR 
PASFR deals only in seven items: rice, sugar, milk powder, edible oil, tea, wheat and lentil. It 
maintains reserve stocks of these items to meet the emergency requirements for four to 
six months. The stocks are regularly rotated, i.e. old stocks are sold in the market and these are 
replenished by new purchases.  
PASFR purchases milk powder and edible oil from importers/traders in Omani market. It does not 
import or export these two items.  PASFR, however, imports rice and sugar from abroad. But it does not enjoy any exclusive or 
special rights or privileges in the importation of rice and sugar. Incidentally, it does not export 
these items. Rice and sugar are periodically sold in  the open Omani market with a view to rotating 
and replenishing the stocks. There is no fixed mark-up. 
 
Private traders are allowed to import and export  rice and sugar without any restrictions. They 
freely compete with PASFR and import on the same basis as PASFR. 
 G/STR/N/10/OMN • G/STR/N/11/OMN • G/STR/N/12/OMN • G/STR/N/13/OMN • G/STR/N/14/OMN 
• G/STR/N/15/OMN 
 
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  There are no long-term contracts by PASFR for the import/purchase of the seven commodities. 
 
Purchases are made on the basis of open tenders.  
4  STATISTICAL INFORMATION 
The following quantities were imported by PASFR in the last three years. 
 
 
(in tonnes)  
Commodity 
imported 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 
Rice - - - - - - 41000 29000 60000 41500 
Sugar - - - - - - 16445 8835 6000 10800 
Lentil - - - - - - - - 42 - 
 
5  REASON WHY NO FOREIGN TRADE HAS TAKEN PLACE IN PRODUCTS AFFECTED 
Not applicable. G/STR/N/10/OMN • G/STR/N/11/OMN • G/STR/N/12/OMN • G/STR/N/13/OMN • G/STR/N/14/OMN 
• G/STR/N/15/OMN 
 
- 3 - 
 
  None of the enterprises in the oil and gas sectors in Sultanate of Oman fall within the definition of 
State Trading as given in Article XVII of GATT 1994  and the "Understanding on the Interpretation 
of Article XVII of General Agreement on Tari ffs and Trade 1994". Notwithstanding this, the 
following information, as requested, is provided without prejudice to the position of Oman on the 
status of the two enterprises. 
 1  ENUMERATION OF STATE TRADING ENTERPRISES 
1. PDO is a company formed for the purpose of conducting Petroleum Operations on behalf of 
the shareholders (The Government, and POHOL which is owned by Shell, CFP and Partex 
being the concession holders). ORC exports long residue on its own behalf. 
 
40 per cent of crude oil produced by PDO is purchased at the Government Selling Price by the 
Private Shareholders of PDO and exported by PD O on behalf of the Government. The balance of 
60 per cent is sold partly as "Buyback" to the private shareholders of PDO and partly as "Direct 
Sales" to other buyers for and on behalf of the Government. 
 All Crude oil sales in the Sultanate of Oman are at Government Selling prices (GSP). 
 
2. Orpic, on the other hand, exports long residue "Bumper Fuel Oil 180 cst" on behalf of the 
Government at market prices. Other refined products, such as gasoline (regular and premium), jet fuel "Kerosene", LPG and diesel, ar e sold locally at prices determined by the 
Government. However, Orpic is allowed to import and sell products locally at Government 
Selling Prices during "Shutdown" of the refinery for maintenance work. 
 
Notwithstanding the above, neither PDO nor Orpic fall  within the context of the definition of State 
Trading, as they do not have the exclusive or special rights or privileges which would enable them to influence, through their purchases or sales, the level or direction of their exports. 
 
2  REASON FOR THE PURPOSE OF THE FORMATION OF PDO AND ORPIC 
1. The Concession Agreement, dated 7
th March 1967, gives PDO the rights and obligations to 
undertake all projects, operations and activities directly or indirectly related to the 
exploration, development, extraction, transpor tation, storage and delivery of petroleum to 
the Government and the former PDO Ltd., in accordance with the direction given to PDO. 
 
2. Oman Refinery Company (ORC) was established as an Omani Limited Liability Company 
in 1982 by a Royal Decree 7/82. The purpose of the Company is to meet the market demand of refined petroleum products. 
 
Sohar Refinery Company (SRC) is considered as one of the complex projects, where it refines 
crude oil and residue produced by the Oman refi nery in Mina Al Fahal. Residue from Oman 
Refinery, Mina Al Fahal is transported through 266 km pipe line to Sohar refinery in Sohar. 
 
The commercial operation of Sohar refinery started in 2006 with operational capacity of 116 thousand per day. Parts of the refined products used to cover the local demand while the rest 
is exported. The main products of this refinery ar e: fuel, diesel, jet and bunker fuel, LPG, sulfur, 
naftha substance, which is used in petrochemical industries. In addition, this refinery produces products that are used as inputs for manufacturing propylene and Aromatic products.  
 
Oman Oil Refineries and Petroleum Industries Company (Orpic) in an important step toward achieving full integration between the Oman Refinery and Sohar Refinery and ease planning and integration. The Oman Oil Refineries and Petroleum Industries Company (Orpic) was established 
by Royal Decree No. 99/2007, which merge Sohar refinery company, Oman refinery company, 
Oman Polypropelene company and Aromatics Oman Limi ted, to be the flagship of Oman refineries 
and Petroleum industries. 
 G/STR/N/10/OMN • G/STR/N/11/OMN • G/STR/N/12/OMN • G/STR/N/13/OMN • G/STR/N/14/OMN 
• G/STR/N/15/OMN 
 
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  3  DESCRIPTION OF THE FUNCTIONING OF PDO AND ORPIC 
1. PDO, as it exists now, has a concession to explore and produce crude oil. PDO also acts as 
an operator for the Government in the production and supply of natural gas within the Sultanate. In addition, PDO, on behalf of the Government, exports crude oil. 
 
Besides PDO, there are other foreign oil companies with concessions in the Sultanate of Oman to 
explore and exploit crude oil and natural gas on a cost recoverable basis. These companies are 
allowed to export oil equivalent to the amount of  money agreed for recovery (Recoverable Costs) 
in any particular year.  Given the level of investments necessary for the ex ploration of oil and gas, there are currently no 
private traders involved in the sectors, except MB Petroleum, a local Omani Company, which has 
recently acquired an exploration and production concession in the country.  
2. Orpic is responsible for the processing of Omani crude into refined products necessary to 
meet local demand. However, the company exports Long Residue (bumper fuel oil), which is associated with the production from this company. 
 
The Sultanate of Oman, as an oil producing country, generates a major part of its revenue from oil. In this respect, economies probably play a part in determining the level of oil production, taking into consideration the level of reserves and,  within the context of good oil field practice, the 
long-term sustainability of production. 
 The level of production and export of refined pr oducts are determined by local demand. Products 
in excess of local demand (bumper fuel oil, jet fu el and diesel) are exported. International market 
forces determine export prices.  
All exports with the exception of jet fuel and di esel, are on the basis of annual contracts between 
the Government (Supplier) and the Buyer.  4  STATISTICAL INFORMATION 
Oman Oil Company for Refineries & Petroleum Industries (Orpic) 
 
(in million of barrels) 
 D.P.K Kerosene  2004 2005 2006 2007 2008 2009 2010 2011 2012 2013  
Items 
Code             
JFO1 Gross Production 1.4 1.8 3.6 4.3 6.2 5.8 4.6 4.9 5.5 4.4 
JFO3 Imports 0.2 0.1 0.2 0.3 0 0.1 0 0 0 0 
JFO Exports 1.5 1.9 3.6 4.9 3.8 3.3 1.5 1.5 1.8 1.0 
JFO5 Bunkers 
International 0 0 0 0 0 0 0 0 0 0 
 
Items  
Code  LPG 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013  
LPG1  Gross Production 0.5 0.6 1.5 2.4 3.8 4.2 3.2 4.3 3.9 3.3 
LPG3 Imports 0.01 0 0 0 0 0 0 0 0 0 
LPG4 Exports 0.01 0.1 1.2 2.1 2.7 3.2 2.3 3.3 2.8 2.2 
 
Items  
Code  Motor  
Gasoline 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013  
MO1 Gross Production 5.3 5.5 9.2 10.5 19.1 18.3 16.2 23.3 23.5 21.7 
MO3 Imports 2.4 3.1 4.7 4.6 1.9 1.7 2.4 1.2 0.7 1.6 
MO4 Exports 0 0 3.2 4.7 8.3 6.2 4.1 6.5 3.4 2.1 
 G/STR/N/10/OMN • G/STR/N/11/OMN • G/STR/N/12/OMN • G/STR/N/13/OMN • G/STR/N/14/OMN 
• G/STR/N/15/OMN 
 
- 5 - 
 
  Items  
Code  Fuel Oil 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013  
RFO1 Gross Production 0 0 2.4 3.9 7.3 5.8 2.3 3.3 3.3 2.1 
RFO3 Imports 0 0 0 0 0 0 0 0 0 0 
RFO4 Exports 4.5 4.8 4.4 4.3 6.8 5.8 2.4 3.4 3.3 2.4 
 
Items 
Code  Gas Oil 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013  
DLO1 Gross Production 6.4 7.1 9.7 10.2 14.7 13.4 11.1 16.0 15.5 14.1 
DLO3 Imports 0.1 0 1.0 1.2 1.2 0 0.6 0 1.4 3.6 
DLO4 Exports 1.0 0.4 2.8 3.3 3.1 2.5 0.6 1.8 1.3 1.0 
 
 
5  REASON WHY NO FOREIG N TRADE HAS TAKEN PLACE 
Not applicable. 
 
6  ADDITIONAL INFORMATION 
None. 
 
 
 
__________