WT/TPR/S/201 Trade Policy Review 
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IV. TRADE POLICIES BY SECTOR 
(1) INTRODUCTION  
1. The contribution of petroleum and natural gas to Oman's economy has increased over the last 
few years, while the shares of agriculture and servi ces have fallen.  Nonetheless, Oman is taking steps 
to diversify its economy away from oil and natura l gas, particularly through new manufacturing 
projects (e.g. liquefied natural gas (LNG)) and to urism ventures.  In accordance with Oman's long-
term development strategy (Vision 1996-2020), the contributions of agriculture and manufacturing to 
GDP are expected to increase, respectively, from 2. 8% to 5%, and from 7% to 29% during the period, 
whereas the shares of services, and oil and natural gas are to fall to 47% (52.3% in 1996), and 19% 
(over 40% in 1996), respectively. 
2. Despite its small and decreasing share of total GDP, agriculture is an important sector in the 
economy because of Oman's food security objective.  Oman is a net exporter of fishery products, but a 
net importer of agricultural products;  food security  is promoted mainly through relatively low 
customs tariffs.  The simple average applied MFN tariff on agricultural products (major division 1 of 
ISIC, Revision 2) is 3.9%.  The Government assists agricultural producers by offering basic 
infrastructure (e.g. drainage and irrigation facilities), soft loans, and free provision of inputs, such as 
new seed varieties, fertilizers, and chemicals. 
3. One major state-owned company, Petroleum Development Oman (PDO), dominates oil and 
natural gas activities, either directly or in c ooperation with foreign ente rprises, through production-
sharing agreements.  Oman is pursuing an intens ive exploration drive to enlarge its hydrocarbons 
reserve base, so as to expand the lifetime of its reserves, and broaden its production capacity.  Oman 
is also increasing its electricity network in order to meet the country's growing demand.  The simple average applied MFN tariff on mining and quarrying (m ajor division 2 of ISIC, Revision 2) is 4.9%.  
Imports of electricity carry a 5% tariff rate. 
4. Oman's manufacturing sector is based on its  comparative advantage in gas-intensive 
industries, notably chemicals and LNG.  The Govern ment holds 100% or is an important shareholder 
in some manufacturing companies (e.g. Oman Polypropylene Company, and Oman Cement 
Company).  Manufacturing is being promoted partly through investment incentives, including exemption from import duties, and tax-holidays for five years (renewable).  MFN customs tariffs on manufactured goods (major division 3 of ISIC, Revision 2) average 5.6%, with rates ranging up to 100% on alcoholic beverages, and tobacco and tobacco products. 
5. Services constitute a crucial component in Oman's  overall policy of economic diversification.  
Private-sector participation is being encouraged by removing obstacles to foreign investment.  
Nevertheless, foreign investment is still not allowe d in certain services activities, such as tourist guide 
services, internal waterway transportation, and taxi  transportation.  Moreover, several state-owned 
companies in Oman operate under monopoly, or hold exclusive rights in some branches (e.g. Oman 
Telecommunications Company, Oman Postal Co mpany, and Oman Air).  Under the General 
Agreement on Trade in Services, Oman made commitm ents in all services categories, and has tabled 
its initial conditional offer in the ongoing services negotiations. Oman WT/TPR/S/201 
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(2) AGRICULTURE , FISHERIES , AND RELATED ACTIVITIES  
(i) Main features 
6. Oman's cultivable area is about 2.3 million ha, i.e. 7% of total land, with the Batinah Plain, in 
the north, accounting for over 50%.1  The sector faces development problems related largely to the 
scarcity of irrigation water, the poor and dec lining quality of the soil due to salinization2, and adverse 
climatic conditions.  Date palm is the key crop grown in Oman, occupying about half the total 
cropped area.  Other crops are fodder crops, mainly alfalfa;  fruit trees, mostly citrus;  vegetables (notably tomatoes and potatoes);  and cereals, such as barley, wheat, and sorghum.
3 Oman is a net 
importer of agricultural products. 
7. Oman's livestock subsector is relatively small,  despite being the leader in the GCC area.  
Nonetheless, in some parts of Oman it is impor tant, notably in the Dhofar region where about 
two thirds of the population depends on livestock for their livelihood.4  Stock levels have increased 
only marginally over the past five years.  Acco rding to the 2004-05 agricultural census, Oman had 
about 1.6 million goats, 350,000 head of sheep, 335, 000 cattle, and 123,000 camels.  Cattle tend to be 
concentrated in the mountains in the southern part  of Oman;  chickens are also raised commercially. 
8. Oman is 100% self-sufficient in dates, banan as, and vegetables when they are in season, and 
51% sufficient in eggs, 46% in beef, 36% in milk, and 23% in mutton.5 Given its limited cultivable 
area and unfavourable climate, Oman is likely to remain heavily dependant on imports to meet its 
domestic demand for most agricultural products (Table IV.1). 
Table IV.1 
Main agricultural products, 2000-05 
(US$ million) 
Product 2000 2001 2002 2003 2004 2005 
Dates 87.8 93.4 74.8 68.9 74.6 74.6 
Goat milk 24.5 24.7 24.9 25.2 25.4 25.5 
Vegetables fresh 18.4 18.4 18.4 18.4 18.5 18.5 
Indigenous goat meat 11.2 6.2 5.8 .. 14.1 14.1 
Tomatoes 9.4 11.0 10.2 9.9 10.2 10.2 
Indigenous camel meat 8.7 8.9 7.6 8.0 9.2 9.2 
Indigenous cattle meat 8. 1 8.4 8.6 8. 3 8.5 8.5 
Hen eggs 5.9 7.6 7.5 7.1 7.5 7.5 
Indigenous chicken meat 4.9 5.3 6.4 6.5 6.6 6.6 
Cow milk, whole fresh 4.7 4.7 4.8 4.9 5.0 5.0 
Bananas 4.6 4.8 4.7 4.1 4.7 4.7 
Table IV.1 (cont'd) 
                                                      
1 Oman has five distinct agricultural regions: the Mu sandam Peninsula;  the Batinah Plain;  the valleys 
and the high plateau of the eastern re gion;  the interior oases;  and the Dhofar region.  Farming in Oman is 
concentrated along the coast and in inland wadis (dry river beds).  In the south, agriculture is spread along a 
narrow coastal plain that receives monsoon rains from the Indian Oc ean, allowing the cultivation of, inter alia , 
coconuts, and bananas (Ministry of Information online in formation.  Viewed at: h ttp://www.omanet.om/english/ 
commerce/econ8.asp?cat=comm).  
2 Saline intrusion in the Batinah area has begun to damage date trees, despite their relatively high 
resistance to salt. 
3 FAO online information.  Viewed at: http://www.f ao.org/nr/water/quastat/countries/oman/print1stm. 
4 Over 70% of the cattle and camels are reared in Dhofar.  However, it holds only 26% of the total 
livestock in Oman. 
5 Ministry of Information online information.  Viewed at: http://www.oma net.om/English/oman2000/ 
sec8/3.asp [7 February 2008]. WT/TPR/S/201 Trade Policy Review 
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Product 2000 2001 2002 2003 2004 2005 
Indigenous sheep meat 2.0 2.0 2.1 2.1 4.3 4.3 
Onions, dry 2.6 3.2 2.9 3.3 3.3 3.3 
Watermelons 2.5 3.1 2.8 2.8 2.8 2.8 
Mangoes 2.6 2.7 2.7 2.7 2.7 2.7 
Tobacco leaves 2.4 2.3 2.3 2. 3 2.3 2.3 
Potatoes 2.6 1.8 2.2 2.2 2.2 2.2 
Lemons and limes 2.1 2.2 2.2 1.8 2.0 2.0 
Sheep milk 1.3 1.3 1.3 1.3 1.3 1.4 
Papayas 0.4 0.4 0.4 0.4 0.4 0.4 
.. Not available. 
Source:  FAO (2007), Food and Agriculture Indicators:  Oman . 
9. The simple average applied MFN tariff for agri cultural products (Major Division 1 of ISIC 
Revision 2) is 3.9%.  Imports of some agricultu ral raw materials and basic food products are duty 
free.   Alcoholic beverages, tobacco and tobacco products, and pork and por k products are subject to 
the highest tariff rate (100%) (Chapter III(2)(iv)(a)). 
(ii) Agricultural policy 
10. Under Sultani Decree No. 91 of 9 September 2007,  the Ministry of Agriculture and Fisheries 
was split into the Ministry of Agriculture (MA), a nd the Ministry of Fisheries Wealth (MFW), in 
order to enhance both agricultural and fisheries activ ities.  On the basis of Oman's Vision 1996-2020, 
the goal for the sector is to grow at a minimum of 4.5% annually (against 2.5%  during 2001-05), so as 
to increase its GDP share to 5% by end 2020.6  The MA is in charge of policy formulation for crops 
and livestock.  It is also responsible for providi ng technical assistance to farmers and enforcing 
sanitary and phytosanitary measures.  Oman's key policy objective for the sector is to ensure food 
security for the population, mainly through importation.   Developing agriculture by offering technical 
assistance and subsidized inputs to producers is also being pursued. 
11. Oman's agriculture policy reflects its overall economic policy, which emphasizes 
diversification of the production base.  Developmen t efforts in agriculture have included promoting 
intensified farming, increasing food production an d conservation, and further developing existing 
agricultural resources.  Recent policy measures emphasize rehabilitation of abandoned farms, 
introduction of modern irrigation and drainage syst ems in all productive farms, promotion of the use 
of treated water, and implementation of legislati on related to water use a nd management.  Vertical 
integration in food processing and improved environmental control of greenhouses are also being 
encouraged. 
12. Oman supports the sector by providing, inter alia , irrigation and extension services.  
According to the authorities, extension services are only for experimental and demonstration 
purposes, and commodities produced under such progr ammes are not marketed commercially.  The 
MA offers guidance and consultancy services to the private sector, with the aim of enhancing product 
quality.  It also assists in the evaluation of techni cal and economic feasibility studies for agri-industry, 
poultry, date processing, and other projects;  undertakes agri-research and extension services;  and 
supports the introduction of innovation in all aspects of agricultural work.  In addition, most farms 
receive inputs (e.g. new seed varieties, fertilizers,  and chemicals free of charge) to improve crop 
production. 
                                                      
6 Ministry of National Economy (2005). Oman WT/TPR/S/201 
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13. The Public Authority for Stores and Food R eserves (PASFR), established in 1980, is 
responsible for maintaining reserves of rice, suga r, milk powder, tea, and edible oil to meet 
emergency requirements for four to six months.  The stocks are rotated regularly, i.e. old stocks are 
sold in the market and replaced by new purchases.  Purchase and sale prices are set at cost value.  
PASFR imports lentils, sugar, and rice through in ternational tenders, while the other products are 
purchased through local tenders.7 
14. Over-farming and attendant water problems we re the main reasons for establishing the 
Ministry of Water Resources in 1990, which was repl aced in May 2001 by the Ministry of Regional 
Municipality and Environment and Water Resource.   This became the Ministry of Regional 
Municipality and Water Resource (MRMWR) in Sept ember 2007, with as its key mandate to limit 
water consumption and improve irrigation.  In 1998, water resources were declared a national 
resource.8  Four main measures were implemented for water management and conservation:  no wells 
may be constructed within 3.5 km of the mother well of the falaj9;  permits are required for the 
construction of new wells, for deepening existing ones,  for changes in use, and for installing a pump;  
all drilling and well-digging contractors are required to register annually with the MRMWR;  and the 
MRMWR has the cooperation of other governme nt agencies in dealing with offenders.10 
15. Following a camel count in the Dhofar region, a strategy is being implemented throughout 
Oman to reduce the number of camels and restore the balance between camels and natural pastures.  
The strategy also aims to increase the amount of wa ter available by reducing the size of the areas used 
for the production of animal fodder in the Batinah re gion.  The first phase of a project to transfer the 
fodder farms to Al Nejd has started, a new town is to be built at a cost of RO 22.8 million.11 
16. Since 2000, domestic support has been provide d for: agricultural research (plant and 
livestock);  pest and disease control (national v accination and treatment, plan protection, and aerial 
spray works and locust control);  training services;  and infrastructure (modern irrigation systems).12 
Oman's domestic support through green box and development measur es reached RO 2.55 million and 
RO 272,450, respectively, in 2005.13 It also notified that it did not grant any export subsidies on 
agricultural products.14  According to the authorities, in 2006, green box and development support 
amounted, respectively, to RO 667,178 and RO 97,336.  In the current five-year plan 2006-10, the MA is financing more technologically oriented projects. 
17. New and expansion projects in agriculture ar e eligible for soft loans from the Oman 
Development Bank (ODB) (Chapter III(4)(i)).  According to the authorities, during 2000-06, 
RO 28.5 million were granted to agriculture (excl uding fisheries).  In 2007, the sector (excluding 
                                                     
 
7 WTO document G/STR/N/9/OMN, 29 January 2004. 
8 Sultani Decree No. 83/1988. 
9 The falaj is the main source of irrigation water in Oman beside wells. 
10 FAO online information.  Viewed at: www.fao.org/ag/agl/aglw/aquastat/countries/oman/index.stm. 
11 The town, which will be supplied with water wells, roads, and services, will cover around 30,000 ha 
over the next five years.  A company with a capital of RO 22.8 million is due to be set up on the farmers' behalf 
to implement the project (Ministry of Information on line information.  Viewed  at: http://www.omanet.om/ 
english/commerce/econ8.asp?cat=comm). 
12 WTO documents G/AG/N/OMN/1/R ev.1, G/AG/N/OMN/3, and G/AG /N/OMN/4, 4 October 2006;  
and G/AG/N/OMN/1, 2 May 2003.  As regards domestic support reduction commitments, the Working Party 
agreed that Oman could have recourse to Articles 6.2 and 6.4(b) of the Agreement on Agriculture (AA) upon 
accession to the WTO.  On export subsid ies, the representative of Oman conf irmed that, in accordance with its 
commitment, Oman would not introdu ce any export subsidies within the context of Part V of the AA after 
accession (WTO document WT/ACC/ OMN/26, 28 September 2000). 
13 WTO document G/AG/N/OMN/4, 4 October 2006. 
14 WTO document G/AG/N/OMN/2, 20 February 2004. WT/TPR/S/201 Trade Policy Review 
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fisheries) received 2.3% of total credit insura nce support provided by the Export Credit Guarantee 
Agency (ECGA).  Oman eliminated all import ba ns and quantitative restrictions on agricultural 
products (e.g. eggs, milk, fruit, and vegetables)  through Ministerial Decision No. 20/2000 and 
Ministerial Decision No. 38/2000. 
18. Imports of food products of animal origin must be accompanied by a health certificate 
declaring them to be free of radiation and dioxi n (Chapter III(2)(v)).  Imports, exports, and domestic 
production of plants and animals are subject to insp ection by the quarantine section of the MA.  All 
imports of plants, plant parts, and plant products (including seeds and grains) must be accompanied by 
phytosanitary certificates.  A health certificate and prior permission from the MA are required to 
import live animals from all countries, including GCC states.  Meat and poultry products must also be 
accompanied by a health certificate from the country of origin, and a halal slaughter certificate issued 
by an appropriate Islamic centre in the count ry of origin (Chapter III(2)(vii)(b) and (c)). 
(iii) Fisheries 
19. Fisheries activities are traditional (small produc tion units), industrial, and aquaculture.15 
Traditional fishing provides over 80% of total fish la nding (Table IV.2).  In 2006, the total catch was 
153,987 tonnes, mostly comprising large pelagic, su ch as tuna, and kingfish;  small pelagic (e.g. 
sardine, mackerel);  and crustaceans.16  Along the Omani coast of 3,165 km, there are around 
30 centralized fisheries landing sites in 6 coastal regions.17 
Table IV.2 
Fish production, 2000-06 
(US$ million and million tonnes) 
 2000 2001 2002 2003 2004 2005 2006 
Traditional        
Weight 108.0 125.0 115.0 119.0 139.0 133.0 131.0 
Value 121.0 134.0 124.0 137.0 159.0 177.0 180.0 
Trawl        
Weight 11.0 27.0 25.0 18.0 22.0 18.0 19.0 
Value 28.0 7.0 66.0 46.0 58.0 25.0 32.0 
Longline        
Weight 1.7 1.9 1.9 1.7 3.5 7.0 4.0 
Value 3.2 3.3 3.3 3.1 6.4 15.3 9.7 
Source: Information provided by the Omani authorities.  
20. Oman is a net exporter of fishery products.  In 2006, exports reach ed US$152.3 million (up 
from US$84.5 million in 2002), i.e. 4.7% of total merchandise exports.  The United Arab Emirates, 
Saudi Arabia, Rep. of Korea , and the EC are Om an's main fish export markets.  Fish imports 
amounted to US$14.2  million in 2006;  most imports are items not available in the Omani market and 
demanded by the foreign community, including freshwa ter fish, shrimp, lobster and salmon largely 
from Asia and Europe. 
                                                      
15 Aquaculture is gaining prominence in Oman and efforts are focusing on the production of shrimp, 
abalone, and other species, such as bream and grouper. 
16 More than 1,500 species of fish and crustaceans have been identified in Omani waters, ranging from 
sardines to tuna.  Per capita consumption of fish is estim ated at 36.7 kg per year (Ministry of Agriculture and 
Fisheries, 2006). 
17 FAO online information.  Viewed at: http://www.fao.org/fi/fcp/en/OMN/profile.htm. Oman WT/TPR/S/201 
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21. The main constraints affecting Oman's fisheri es include: inadequate infrastructure;  small 
fishing boats with limited upgrade potential;  lack of updated information on fish stocks18;  inefficient 
marketing system due to lack of marketing infrastru cture;  fish transport trucks that do not meet 
quality control requirements;  and c onflicts between the subsector and other activities, such as tourism 
and industry.19 
22. The MFW is responsible for, inter alia , issuing licences and maintaining licence registers for 
fishermen and vessels, fish handlers, transporte rs, exporters, and processing plants.  Traditional 
fishing can only be done by Omanis.  Industrial fi shing is subject to a quota system;  national 
companies can lease their quota to foreigners (i.e. foreign vessels may only fish in Oman under charter to an Omani company that has a fish quota).
20  Licences may be issued on an annual basis or 
for a single voyage.  Other restrictions include area,  species, and weight and by-catch considerations.  
Fees vary depending on vessel size and catches.  All licensed industrial fishing vessels are required to 
be Vessel Monitoring System (VMS) comp liant, and to have an observer on board. 
23. During the last few years, Oman's developm ent policies have centred on modernizing the 
traditional fleet of 13,706 vessels, establishing ex tensive port facilities, implementing international 
quality standards for exports, and enhancing its research capacity.  The development of aquaculture, 
traditional inshore and industrial offshore fisheri es, as well as enhanced processing capabilities, is a 
key focus of Oman's development and diversification process.  Some other objectives of the MFW for the subsector are:  sustainable use of resources, Omanization of both offshore commercial fisheries 
and industrial fleets, and maximizing export earnings.  Oman is also implementing work to prevent, 
deter, and eliminate illegal, unrepor ted, and unregulated fishing on the basis of the 2001 International 
Plan of Action by FAO.
21  
24. Fisheries in Oman is governed by the Marine Fishing Law of 1981 and its executive 
regulations.22  Due to changes in the international market  and the need to conf orm with the FAO Code 
of Conduct with regard to rational fishing, a new dr aft law is under consideration.  Provisions of the 
proposed legislation include the appointment of auth orized fisheries officers  with powers to search 
and detain, and the establishment of an administra tive penalty procedure to deal with fisheries 
offences.23  Under Oman's legal framework, fishing vessel s must be fully equi pped for handling and 
preserving fish and fish products;  any discards are prohi bited, regardless of the type of fish, to help 
mitigate marine environment pollution and reduce wast e in fish production;  certain gear harmful to 
aquatic resources is banned, incl uding nylon and floating drifting nets;  and commercial fishing for 
demersal species is prohibited from 15 July to 15 November.24  Export restrictions apply to three 
species of fish (i.e. lobster, abalone, and sh rimp) during the breeding and reproduction seasons 
(Chapter III(3)(iii)).  At the GCC level, efforts are being made to harmonize the shrimp closed 
                                                      
18 A major resource assessment survey is planned in the context of Oman's 2006-10 plan, aimed at 
providing an estimate of the fishable biomass to guide development and investment decisions. 
19 FAO online information.  Viewed at: http://www.fao.org/fi/fcp/en/OMN/profile.htm. 
20 The chartering company concerned is responsible for the licen ce application, which should include 
vessel and crew certification for clearance by the Minist ry of Transport and Communications.  The captain and 
crew are also required to have medical clearance (Ministry of Agriculture and Fisheries, 2006). 
21 Ministry of Agriculture and Fisheries (2006). 
22 Sultani Decree No. 53/1981.  Other fisheries legislation includes:  Rules of Operation for Industrial 
Fishing Vessels;  Quality Control Regulations of Omani Exported Fish;  and Industrial Fishing Vessels Equipped for Preservation and Handling of Fish Products (Ministerial Decision No. 121/1998). 
23 Ministry of Agriculture and Fisheries (2006). 
24 This closed period is currently under review in light of scientific evidence regarding the reproduction 
seasons (FAO online information.  Viewed a t: http://www.fao.org/fi/fcp/en/OMN/profile.htm). WT/TPR/S/201 Trade Policy Review 
Page 50 
 
 
seasons to six months annually, and an ongoing regi onal shrimp stock assessment programme is in 
place. 
25. In 1980, the Oman National Fisheries Comp any (ONFC) was established to purchase, 
distribute, and export catches by local fishermen, and to handle fish caught by concessionaires.   In 
1987, the ONFC was merged into the Oman Fisheries Company (OFC).25  The OFC is the largest 
fishing company in Oman, and is included in the privatization programme (Chapter III(4)(iii)).  Oman 
provides subsidies to: purchase fibreglass boats and outboard engines;  co nstruct workshops, cold 
storage facilities, and jetties along the coastline;  and establish companies to market fish both 
domestically and internationally.  In 1978, the Fishermen's Incentive Fund was established with the 
aim of developing the local fishing industry.  A Marine and Science and Fisheries Centre was 
established in 1986, with FAO and UNESCO support.  New and expansion projects in fisheries are 
eligible for soft loans from the ODB (Chapter III(4)(i )).  According to the authorities, during 2000-06, 
RO 15.1 million were granted to the fisheries subs ector.  In 2006, the subsector accounted for 12.1% 
of total credit insurance support provided by the Export Credit Guarantee Agency (ECGA) 
(Chapter III(4)(iv)). 
26. Oman is party to, or has accepted:  the C onvention on International Trade in Endangered 
Species of Wild Fauna and Flora (CITES);  UN C onvention on the Law of the Sea;  UN Convention 
on the Conservation and Management of Straddling Fi sh Stocks and Highly Migratory Fish Stocks;  
Agreement for the Establishment of the IOTC;  Agreement for the Establishment of the Regional 
Commission for Fisheries;  and International Whaling Commission.   
27. MFN tariffs on imports of fishery products average 1.2%, with rates ranging up to 5% 
(Table AIV.1). 
(3) MINING , QUARRYING , AND ENERGY  
(i) Mining and quarrying 
28. In general, there are two groups of minera ls in Oman: metallic and non-metallic.  Non-
metallic rocks and minerals include construction raw materials and industrial rocks and minerals (e.g. 
marble, silica, gypsum, dolomite, la terite, various types of clay, and limestone), and are located 
almost throughout the country.26 Metallic minerals, i.e. gold,  silver, copper, and chromite27, are being 
mined mainly in north Oman.28 
29. Under the Petroleum and Minerals Law of 197429, as amended by the Mining Law of 200330, 
Oman's exhaustible natural resources, including pe troleum and mineral wealth, are 100% owned by 
the State.  The industry's main policy goals incl ude: promoting economic growth, and employment of 
Omani nationals;  diversifying the economic base;  and strengthening the participation of the private 
sector through privatization. 
                                                      
25 Sultani Decree No. 79/1987.  The OFC, a joint-stock company, is 24% owned by the Government 
(Oman Fisheries Company online information.  Viewed  at: http://www.omanfisheries.com/corporate.htm). 
26 Oman has a higher degree of industrial minera ls in the mountains than in the flat areas. 
27 Gold production declined from 1,029 kg in 2000 to 123 kg in 2005.  Chromite production rose from 
13,800 tonnes in 2004 to 34,000 tonnes in 2005, while copper cathode production increased from about 
15,000 tonnes to 25,000 (Economist Intelligence Unit, 2007). 
28 Geologists believe that Oman's mineral wealth is still largely untapped (Oman Economic Review 
online information.  Viewed at: http://www.oeronline.com/php/2002_june/cover.php). 
29 Sultani Decree No. 42/1974. 
30 Sultani Decree No. 27/2003. Oman WT/TPR/S/201 
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30. The Directorate General for Minerals (DGM) and the Directorate General for Industries 
(DGI), both under the Ministry of Commerce and I ndustry (MOCI), oversee the subsector;  the DGM 
issues prospect and exploration permits for minerals31, and the DGI issues quarry permits and mining 
leases (Table IV.3).  The DGI is responsible fo r implementing the mining legislative framework and 
the safety regulations.  The DGM, on the basis of its geological survey, carries out basic geological 
studies, and prepares both geological maps on va rious scales, and prospects for metallic and non-
metallic minerals.  It also undertakes collaborativ e research projects on Oman's geology and mineral 
exploration with various countries.32 
31. Investors, national and foreign, are liable for an  application fee of RO 25 for all permits and 
RO 50 once the permit is granted (Table IV.3).  In  terms of royalties, investors pay 5% on the sale 
value of all minerals and rocks.  The main meta llic minerals are produced by the fully state-owned 
Oman Mining Company (OMC), and the National Mining Company (NMC), established in 1997 and 
privately owned.  In addition, chromite is bei ng mined by Oman Chromite Company (OCC), which is 
partially state-owned.  Both OMC and OCC are in  the privatization portfolio (Chapter III(4)(iii)).33 
Table IV.3 
Mining permits and leases, 2008 
 Quarry permit Prospecting permit Exploration permit Mining lease 
Purpose 
 Exploitation of all minerals 
and rocks    
Applicants must submit an 
application, including 
proposed programme of work Exploration of unknown 
specific minerals/minerals 
Applicants must submit an 
application, including a 
detailed programme of exploration;  the know-how 
available;  financial status;  
and past experience in similar 
work  If minerals are discovered 
during prospecting permit 
period and more detailed 
prospecting is needed for 
proper evaluation Applicants must submit an 
application, including 
proposed programme of work showing the technical methods 
to be used, technical personnel 
to be employed, and a financial estimate of the programme Holders of a prospecting 
permit, exclusive prospecting 
permit or quarry permit, that 
in the course of exploration or 
other operations discover mineral/minerals of sufficient 
size and have carried out 
sufficient development, preparatory or exploratory 
work making it possible to 
continue the operation for at least 5 years, may apply for a mining lease 
Area 
 All minerals and rocks:  1 km2 
Chromite quarrying:  500 m 
by 500 m  
Larger areas can be granted 
depending upon the applicant's 
requirements Not defined Not more than 20 km2 Not defined 
Duration 
 1 year renewable Initially for 1 year;  renewable 
for another year on satisfactory performance of 
the applicant Initially 2 years;  renewable 
on yearly basis to a maximum of 6 years Minimum 5 years;  maximum 
25 years 
Table IV.3 (cont'd) 
                                                      
31 In December 1999, a Sultani Decree transferred the DGM to the MOCI from the Ministry of 
Petroleum and Minerals (now renamed Ministry of Oil and Gas) (Ministry of Information online information.  
Viewed at: http://www.omanet.om/English/om an2000/sec8/3.asp [7 February 2008]). 
32 The DGM's Department of Mineral Exploration undertakes detailed exploration, including mapping, 
sampling, drilling and pre-feasibility studies. 
33 OMC and OCC were established in 1983 and 1991, respectively.  OMC was created originally as a 
joint-venture with the private sector but is 100% state-owned (Ministry of Information online information.  Viewed at: http://www.omanet.om/English/om an2000/sec8/3.asp [7 February 2008]). WT/TPR/S/201 Trade Policy Review 
Page 52 
 
 
 Quarry permit Prospecting permit Exploration permit Mining lease 
Fees 
 Application fee: RO 25 
Quarry permit fee:  RO 50 
Bank guarantee:  RO 4,000 to RO 10,000 Application fee:  RO 25 
Prospecting permit fee:  
RO 50 Rental fee:  RO 50/year Application fee:  RO 25  
Permit fee:  RO 50 
Annual fee: RO 50/km
2 or part 
there of  Application fee:  RO 25  
Annual fee:  RO 100/km2 or 
part there of  Bank guarantee:  to be 
indicated by MOCI depending 
upon operations  Royalty payable at the 
prescribed rate in the mining 
permit regulations 
Permit holder's responsibility 
 Submit a monthly report on 
production and operational 
activities Submit a bank guarantee prior 
to the grant of the permit  
Pay royalty on material sold or consumed Submit quarterly progress 
report to include 
comprehensive data on operations  
Report on expenditures and 
employment  Report on the result of 
geological/geophysical/geo-
chemical or any other investigations Submit quarterly summary 
reports of activities  
During the first quarter of every year, submit an annual 
report giving details of 
operations during the preceding calendar year, e.g. 
surface and U/G plans, 
sections etc., bore hole logs and other relevant geological, 
mineralogical and economic 
factors involved working costs and capital expenditure incurred Development of deposits must 
commence within 6 months of 
the grant of lease  Submit a monthly report in a 
format approved by MOCI  
During the first quarter of each year, submit an annual 
report giving full details of the 
activities executed along with account statement showing 
working expenditures 
Quarry permit holder's responsibility 
 Prospect for and mine or 
quarry mineral/minerals as 
specified in the permit 
Erect permanent housing 
building structures, machinery, and other works 
necessary for mining and 
quarrying  With prior approval of the 
DGM, can engage in 
underground mining  May apply for mining lease in 
substitution of quarry permit if 
the operations have progressed and expanded sufficiently 
Make all necessary 
excavations on the land surface 
Stack, impound or otherwise 
dispose off any of the products mined Prospect for mineral/minerals 
defined in the permit  
Construct on any unoccupied 
land a temporary camp site 
and such temporary structures and work necessary for the 
operation 
Construct access roads or airstrips  
Dig plots, trenches, and other 
prospecting excavations, and drill exploratory bore holes  
Take and remove samples of 
soils, rocks, and other minerals in the permit area 
necessary for proper 
evaluation of any mineral occurrence found Prospect for mineral/minerals 
specified in the permit  
Explore by means of adits, 
shafts, or other underground 
workings  Erect plants for experimental 
treatment of minerals  
Construct access roads, airstrips, temporary camp 
sites, structures, and works 
necessary for the operations Take and remove samples of 
soils, rocks, and other 
minerals in the permit area necessary for operations Prospect for and mine 
minerals as specified in the 
lease  
Sell, export or dispose of such 
minerals  Make all necessary 
excavations  
Erect permanent buildings, structures, machinery, plant 
and other works, and construct 
roads, airfields and other facilities necessary for the 
operations  
Take building minerals for construction purposes with the 
prior approval of the ministry 
provided they will not be sold to a third party 
Stack or dispose of tailings 
and any other product of mining with fulfilment of 
environmental regulations 
Source:  Information provided by the Omani authorities. 
32. Mining and quarrying industries do not enjoy an y specific incentives.  However, they are 
eligible for the incentives availa ble to all companies, such as exemption from import duties and other 
levies, five-year tax-holidays (renewable),  and customs clearance facilities (Chapter III(4)(i)). 
33. Export permits, for control and statistical purposes,  are needed for locally mined or quarried 
products as well as for geological samples. 
34. MFN tariffs on mining and quarrying products (maj or division 2 of ISIC, Revision 2) average 
4.9%, and range from zero to 5% (Table AIV.1). Oman WT/TPR/S/201 
 Page 53 
 
 
(ii) Crude oil 
35. Oman's oilfields are concentrated in the central interior and in Dhorfar.34  In contrast to other 
GCC countries, oil reserves in Oman  are characterized by small fiel ds and complex geology, with 
exceptionally dense oil and the highest  extraction costs in the region.  At the end of 2006, oil reserves 
amounted to 4,917 million barrels (m b) (against 4,832 mb in 2005).35 Despite new oil discoveries36, it 
is estimated that by 2030 the country's reserve could largely be depleted.  Total oil production 
decreased from 328 mb in 2002 to 269.2 mb in 2006 (Table IV.4). 
Table IV.4 
Oil production, exports, and refinery, 2002-06 
 2002 2003 2004 2005 2006 
Oil production (million barrel s) 328.0 299.0 285.0 282.6 269.2 
Oil exports (million barrel s) 306.2 278.5 263.6 262.1 233.2 
Crude oil (US$ million) .. 7,762.1 9,079.1 13,188.9 14,378.0 
Refined oil (US$ million) .. 159.7 159.9 229.7 123.3 
LNG (US$ million) .. 1,393.8 1,611.7 2,310.6 2,976.9 
Average price of oil (US$/b arrel) 24.29 27.84 34.42 50.26 61.69 
Refinery ('000 barrels)a 30,630.0 30,963.9 28,945.4 31,863.1 31,307.0 
Input ('000 barrels) 30,630.0 30,963.9 28,945.4 31,863.1 31,307.0 
Crude oil 30,630.0 30,963.9 28,628.3 31,546.0 31,027.4 
Output ('000 barrels) 30,630.0 30,963.9 28,945.4 31,863.1 31,307.0 
Gasoline 5,428.4 5,799.8 5,215.0 5,436.3 5,078.0 
Regular 90 1,316.7 1,293.0 1,269.1 1,356.9 1,374.0 
Super 97 4,111.7 4,506.8 3,945.9 4,079.4 3,704.0 
Kerosene 2,008.3 1,728.2 1,406.9 1,772.0 2,339.0 
Gasoil 6,658.4 6,602.1 6,442.4 7,090.0 6,750.0 
Butane 545.4 545.4 472.8 580.0 630.0 
Long residue (bunker) 14,941.7 15,306.3 14,246.6 15,445.1 14,946.8 
Change in intermediate pr oducts 52.3 -24.4 66.3 23.2 111.7 
Fuels 995.5 1,006.5 1,095.4 1,244.0 1,144.1 
.. Not available. 
a Oman Refinery Company. 
Source: Ministry of National Economy (2007) , Statistical Year Book – Thirty-Fifth Issue, October;  and Central Bank of 
 Oman (2007), Annual Report 2006 , June. 
36. Reflecting the declining trend in oil production over the last few years, the volume of Oman's 
crude oil exports decreased from 306.2 mb in 2002 to 233.2 mb in 2006.  However, their value increased by 85.2% during 2003-06, largely due to th e hike in the average price per barrel of Omani 
crude oil from US$27.84 to US$61.69 during the period (Tab le IV.4).  Almost all of Oman's crude oil 
exports go to Asian countries, notably China and Thailand. 
37. The Ministry of Oil and Gas (MOG) is responsible for, inter alia , designing Oman's oil and 
gas production policy based on optimizing the ratio of low-cost oil production to total oil production, 
and maintaining a sustainable level of production over  the medium and long term.  To this end, the 
                                                     
 
34 The first oil concession in Oman was granted, in 1925.  Oil was discovered in commercial quantities 
in 1962-63 and exports began in August 1967 (Ministry of Information online information.  Viewed at: http://www.omanet.om/English/oman2000 /sec8/3.asp [7 February 2008]). 
35 Central Bank of Oman (2007).   
36 In 2006, four new oilfields were discovered in the north and south of Oman (Oxford Business Group, 
undated). WT/TPR/S/201 Trade Policy Review 
Page 54 
 
 
MOG intends to restrict production to a maximum of 6.5% of remaining reserves per year37, while 
various production sharing agreem ents (PSAs) are in operation.  In 2005, a US$10 million PSA was 
signed between the MOG and some foreign compani es (e.g. Reliance of India and Circle Oil of 
Ireland) for exploration and development activities.   In 2006, the MOG signed seven exploration and 
PS agreements (for a combined value of US$340 milli on) with local and foreign companies for seven 
concession oil blocks.38  Moreover, in 2006, the first oil future  contract in the Middle East was signed 
between the MOG and the Dubai Mercantile Exchange (DME).39 
38. Petroleum Development Oman (PDO), a state-owned company created in 195140, owns and 
manages 109 of the country's 130 oilfields.  In 2004, the Government extended PDO's concession for 
a further 40 years.  Oman's single pipeline is  owned and operated by PDO on behalf of the 
Government;  use of the pipeline is subject to tax es.  PDO hopes that production will start to increase, 
or at least stabilize, towards the end of the decad e along with enhanced oil recovery (EOR) projects.41  
With this in mind, investments for US$10 billio n are envisaged in Oman's 2006-10 Development 
Plan, including upstream (extraction of hydrocarbons) EOR projects.42  Other producing companies 
include: Occidental Oman43;  Oman Oil Company (100% state-owned)44;  Occidental Mukhaizna45, 
Daleel Petroleum (joint-venture);  Novus Oman (a private company from Indonesia);  and Petrogas 
(from the United States). 
39. In order to add value to crude oil production a nd integrate it with other objectives and projects 
in upstream and downstream (processing of hydr ocarbons) industries, Oman has been increasing 
production of refined products, such as gasoline, kerosene, and long residue (bunker).46  Output of 
refined products rose from 30,630 mb in 2002 to 31,307 mb in 2006.  In November 1982, oil refining 
started in Oman through the wholly state-owned Oman Refinery Company (ORC), with a capacity of 
106,000 barrels per day (b/d).  In 2006, a new refi nery, Sohar Refinery Company (SRC), also wholly 
sate-owned47, became fully operational, with a capacity estim ated at 116,400 b/d.  SRC is          
                                                      
37 Ministry of Information online information.  Viewed at: http://www.omanet.om/English/oman2000/ 
sec8/3.asp [7 February 2008]. 
38 The firms that won concessions included Indago Petroleum of the United Kingdom, and Taqah Oil 
Exploration Company, an Oman-based cons ortium (Economist Intelligence Unit, 2007). 
39 This move also marks a notable shift away from the West Texas Intermediate and Brent oil 
standards, which are more commonly used internationally , mirroring fluctuations in "sweet crude", as opposed 
to the "sour crude" produced in the region (Central Bank of Oman, 2007).   
40 PDO is owned by:  the Government of Oman (60% of the shares), Sultani Dutch Shell (34%), Total 
(4%), and Partex Oil and Gas of Portugal (2%). 
41 EOR projects aim to boost output through a combination of the increased use of traditional methods, 
such as water flooding, and the introduction of more advanced techniques, including miscible gas and steam injection programmes (Oxford Business Group, undated). 
42 Central Bank of Oman (2007).   
43 Occidental Oman, an Omani compan y, is the second largest oil producer in Oman under production 
sharing contracts.   
44 The Oman Oil Company was established in the late eighties with the intention of entering into 
foreign joint-ventures and oil-trading operations (Min istry of Information online information.  Viewed at: 
http://www.omanet.om/English/oman2000 /sec8/3.asp [7 February 2008]). 
45 Occidental Mukhaizna is owned by: Occidental Oman (45%);  Oman Oil Company (20%);  Shell 
Oman Marketing Company (17%);  Liwa Energy, owned by the Government of the UAE (15%);  and other 
private Omani companies (3%) (Oxford Business Group, undated). 
46 All refined products were imported into Oman un til 1982 when the refinery at Mina al-Fahal came 
on stream, originally with a capacity of 50,000 barrels per day (Ministry of Information online information.  
Viewed at: http://www.omanet.om/English/om an2000/sec8/3.asp [7 February 2008]). 
47 Sohar Refinery Company is 80% owned by Oman Oil Company and 20% by the Government of 
Oman, represented by the Ministry of Finance (Oxford Business Group, undated). Oman WT/TPR/S/201 
 Page 55 
 
 
export-oriented, with only 10% of its refined products sold in Oman.48  Petroleum products that are 
supplied to the local market by ORC or SRC, in qua ntities sufficient to satisfy domestic requirements, 
are prohibited from export.49  Until the late 1990s, all ORC's refi ned products were marketed through 
Oman Shell and British Petroleum.  Subsequently , neither company was allowed to establish new 
service stations, so as to allow the ORC to dist ribute fuels through its own marketing company, 
established in 1994, with the brand name al-M aha and the national colours for its livery.50  Currently, 
there are three distributors:  Oman Shell, Oman Oil Company, and al-Maha. 
40. Refineries buy crude oil from the Governme nt and sell refined products to the three 
distribution companies.  Some refined products (such as gasoline) are subsidized on a case-by-case 
basis.  On the domestic market, price caps are set fo r petroleum products at each stage of distribution;  
prices are differentiated according to final use.  Imports of petroleum products for local consumption 
are not allowed. 
41. PDO exports the Government's shares of crude oil.  All producers are free to export their 
shares (crude or refined).  The Government sets minimum prices for exports.  Income derived from 
the retail sale of petrol and petroleum products  is taxed at 55% on net income of production 
companies51, and at 12% on net income of distribution companies. 
42. The MFN tariff on imports of crude oil is 5% (Table AIV.1). 
(iii) Natural gas 
43. Natural gas is at the centre of Oman's industrialization and diversification plans.52  T h e  
development of the liquefied natural gas (LNG) industry53, and the current investment in large gas-
based industrial projects are key elements of this strategy.  Natural gas is also used to power a 
substantial percentage of Oman's elect ricity generation and water desalination.54  Proven natural gas 
reserves were 24.24  trillion cubic feet (tcf) in 2004.  There are ten "non-associated" gas fields, of 
which four belong to PDO, five to Occidental  Company, and one to Novus Company.  Total 
production of natural gas reached 1.1 million cubic feet (mcf) in 2006 (up from 852,856 mcf in 2004), 
of which almost 80% is non-associated.  Natural gas is  exported primarily in the form of LNG;  a very 
small percentage of total pr oduction is exported to the UAE as natural gas (Table IV.5). 
44. The companies Oman LNG LLC and Qalhat LNG SAOC have a liquefaction capacity of 
7.1 and 3.3 million tonnes per year, respectively.  They have the exclusive rights to: produce and sell 
LNG and its by-product, natural gas liquids (NGLs);  and undertake, directly or indirectly, project 
                                                      
48 Central Bank of Oman (2007).   
49 WTO document WT/ACC/OMN/26/Add.2, 29 September 2000. 
50 Ministry of Information online information.  Viewed at: http://www.omanet.om/English/oman2000/ 
sec8/3.asp [7 February 2008]. 
51 WTO document WT/ACC/OMN/26/Add.2, 29 September 2000. 
52 Large discoveries of non-associated  gas in central Oman (Saih Rawl and Barik) in the late 1980s and 
early 1990s started Oman's policy to develop natural ga s as an alternative source of income to crude oil. 
53 Oman's first LNG export was to Korea in April 2000.  The Oman LNG and Qalhat LNG projects in 
Sur are the biggest development projects ever undertaken by Oman, and use about 45% of its natural gas production (Ministry of Information online informat ion.  Viewed at:  http ://www.omanet.om/English/ 
oman2000/sec8/3.asp [7 February 2008]). 
54 Natural gas is mainly re-injected into the oil reservoirs to maintain pressure and sustain oil 
production, and is used for LNG trains.  An increasing share of the gas is being used as fuel to generate power, 
and in desalination plants, cement factories, and other in dustrial projects.  The authorities estimate that domestic 
industrial use of gas will further rise, as demand increases  from gas-based projects such as fertilizer, aluminium, 
cement, and petrochemicals industries (Oxford Business Group, undated). WT/TPR/S/201 Trade Policy Review 
Page 56 
 
 
operations and activities necessary to liquefy, store, transport, sell locally, and export Oman's natural 
gas and LNG.55 In addition, the gas fields in central Oman  are being developed for the Government by 
PDO. 
Table IV.5 
Natural gas production, 2004-06 
(Million cubic feet) 
 2004 2005 2006 
Production 852,856 917,746 1,068,888 
Associated 287,642 270,562 243,052 
Non-associated 565,214 647,184 825,836 
Uses 852,856 917,404 1,059,825 
Government gas system 162,700 172,381 186,781 
Oman LNG 360,556 365,030 359,105 
Exported (UAE) 23,211 40,910 46,533 
OIC 793 35,470 47,290 
Oil fields 144,281 148,110 172,133 
Fuel 60,204 62,458 70,707 
Re-injection 84,077 85,652 101,426 
Flared 69,530 50,885 57,282 
Others 91,785 104,618 190,701 
Source: Ministry of National Economy (2007),  Statistical Year Book – Thirty-Fifth Issue, October;  and Central Bank of 
 Oman (2007), Annual Report 2006 , June. 
45. The Oman Gas Company owns and operates the c ountry's gas transportation facilities, mainly 
supplying the power generation pl ants and other small consumers.56 In 2002, it completed the 
construction of the Sohar and Sa lalah pipelines in 2002.  The S ohar pipeline capacity is about 
12.7 million cubic metres per day, while the Salalah pipeline has a capacity of 4.2 million cubic metres per day.  Furthermore, the Dolphin Gas pipe line connecting Qatar with Oman is expected to be 
operational in the first quarter of 2008;  in Sept ember 2005, an agreement was signed to supply Oman 
with 4.5 million cubic metres per day beginning in 2008.
57 
46. Natural gas for households is subject to a pri ce cap.  The MFN tariff on imports of natural gas 
is 5% (Table AIV.1). 
(iv) Electricity 
47. Oman's total electricity production wa s 13,585 million kWh in 2006 (up from 
9,737 million kWh in 2001) (Table IV.6), as access to rural and mountainous areas has been extended.  
There are four electricity consumer tariff categorie s (Table IV.7), with a subsidized tariff (up to 
certain levels of consumption) in place for commerce,  industry, agriculture and fisheries, and tourism. 
                                                      
55 Oman LNG LLC, established by a Sultani Decr ee in 1994, is a joint-venture between the 
Government of Oman (51%), Sultani Dutch Shell (30%), Total (5.54%), KOLNG (5%), Partex (2%), Mitsubishi 
(2.77%), Mitsui (2.77%), and Itochu (0.92%).  Qalhat LNG SAOC, established in 2003, is a joint-venture 
between the Government of Oman (46.84%), Oman LNG LLC (36.8%), Union Fenosa of Spain (7.36%), 
Itochu Corporation (3%), Mitsubishi Corporation (3%), and Osaka Gas (3%).  The Qalhat LNG liquefaction train is located adjacent to two identical trains of Oman LNG at Qalhat;  the two companies share certain 
facilities (AME online information.  Viewed at: http ://www.ameinfo.com/87064.html [8 February 2008]). 
56 The Oman Gas Company, established as a closed joint-stock company in August 2000, is owned by 
the Government of Oman represented by the MOG (80%), and by Oman Oil Company (20%) (Oman Oil 
Company online information.  Viewed at: http://www.oma n-oil.com/projectsinoperation.asp [8 February 2008]). 
57 Qatar is home to the largest non-associated gas reservoir in the world.  Dolphin Energy, from the 
UAE, owns and operates of the pipeline (Oxford Business Group, undated). Oman WT/TPR/S/201 
 Page 57 
 
 
Table IV.6 
Electricity and water production and distribution, 2001-06 
(Million kWh) 
 2001 2002 2003 2004 2005 2006 
Electricity       
Production  9,737 10,331 10,714 11,499 12,648 13,585 
Muscat 5,269 5,758 4,600 3,978 4,729 4,861 
Dhofar 869 900 863 625 1,097 1.281 
Distribution 9,178 9,851 10,303 10,959 12,023 13,127 
Muscat  5,298 5,477 4,206 3,704 4,461 4,655 
Dhofar 835 865 845 619 1,095 1,265 
Water       
Production  21,538 22,724 23,978 27,083 29,844 33,158 
Muscat 13,722 14,615 15,342 16,735 17,678 18,909 
Dhofar 3,117 3,404 3,489 3,538 3,638 5,815 
Distribution 21,529 22.855 23,951 26,724 29,590 33,109 
Muscat  13,793 14,819 15,388 16,799 17,686 19,123 
Dhofar 3,062 3,350 3,433 3,464 3,568 5,709 
Source: Ministry of National Economy (2007) , Statistical Year Book – Thirty-Fifth Issue, October. 
Table IV.7 
Electricity tariffs, 2008 
Tariff category  Range Tariff (RO) 
Commercial n.a. 0.02 
Industrial 
  May to August 
  September to April  
n.a 
n.a  
0.024 
0.012 
Agriculture and fisheries Up to 7,000 units 
Above 7,000 0.01 
0.02 
Tourism Up to 3,000 units 
3,001 to 5,000 units 
Above 5,000 0.01 
0.015 
0.02 
n.a. Not applicable. 
Source: Ministry of Commerce and Industry (2003), Doing Business in Oman:  The One Stop Shop Handbook . 
48. The main problem in the subsector is the need  to increase capacity to meet higher demand in 
urban areas, as Omanis become more affluent and the population expands.  With this in mind, private 
sector participation (local and foreign) is bei ng encouraged, and a numbe r of independent power 
plants have recently come on stream.  Under the 2004 Electricity Law58, the Government unbundled 
the subsector, and transferred all the relevant as sets and liabilities from the Ministry of Housing, 
Electricity and Water to ten independent compan ies under the umbrella of the fully state-owned 
Electricity Holding Company (EHC).  EHC also produces and distributes water through desalination 
plants.  Several state-owned power companies ha ve been privatized, including the Al-Kamil and 
Salalah power companies which were divested on B OOT (build, own, operate, and transfer) basis 
(Chapter III(4)(iii)).  The law also requires that a ll future electricity projects be carried out by 
independent power providers (IPP).59  Electricity generation is open to competition, while 
transmission and distribution are under the monopoly of EHC. 
                                                      
58 Sultani Decree No. 78/2004. 
59 Manah power project, the first IPP in operation in Oman, was sold to the United Power Company 
and has a capacity of 285 MW.  Al-Kamil power project was awarded to International Power for the 
construction and operation of a 275 MW gas-based power plant.  Barka independent power and water project, with a power capacity of 427 MW and 20 million gallo ns per day of water output, was awarded to AES WT/TPR/S/201 Trade Policy Review 
Page 58 
 
 
49. The Electricity Law also created the Author ity for Electricity Regulation (AER), an 
independent body, fully fu nded through licence fees on the activities of all firms providing electricity 
and water in Oman.  The law limits the amount of electricity that Oman can import.60 
50. The MFN tariff on imports of electricity is 5% (Table AIV.1). 
(4) MANUFACTURING  
51. The manufacturing sector grew at an average of 18.8% during 2001-05, well above the 11.7% 
target rate.61 Manufacturing is based mainly on energy-int ensive industries, notably refined petroleum 
and liquefied natural gas (LNG) products (55.3% of  value added in manufacturing in 2005), chemical 
and chemical products (13.1%), and non-meta llic mineral products (12%) (Table IV.8).62 
Manufactured goods, led by machinery and trans port equipment and automotive products, have 
traditionally dominated Oman's total imports, ac counting for about 80% of total imports in 2006 
(Chapter I(3)(i)). 
Table IV.8 
Value added, investment, ex ports, and employment in the manufacturing sector, 2005 
(RO million and number of workers) 
Subsector Value added Investment Exports Employment Omanizationa 
Food products and beverage s 77.2 128.7 122.2 8,134 3,687 
Ready-made clothes 3.4 3.1 3.3 1,809 424 
Wood and wood products 7.1 2.4 0.0 823 205 
Paper and paper produc ts 5.2 11.9 3.3 695 301 
Publishing activities, printing, and 
photocopying 9.7 16.5 16.7 1,568 584 
Refined and LNG products 589.4 1,120.6 100.4 1,201 920 
Chemicals 139.9 409.2 20.5 2,700 1,150 
Plastic products 15.4 25.4 61.8 2,018 731 
Non-metallic mineral produc ts 127.6 178.7 99.8 8,599 2,873 
Basic metals 20.2 66.2 4.9 1,405 721 
Fabricated metal construction products 18.1 16.5 3.2 3,559 1,188 
Machines and equipment 9.3 7.3 50.9 607 219 
Electric appliances and machines 15.6 18.5 16.9 1,024 465 
Furniture 18.5 10.0 122.2 1,941 580 
Other 10.1 10.2 3.3 660 259 
Total 1,066.6 2,025.2 511.0 36,743.0 14,307.0 
a Nationals (under the Omanization programme).   
Source:  Ministry of Commerce and Industry (2006), Features of the Manufacturing S ector's Large and Medium Industries 
 (2005 data) .   
52. The manufacture of chemicals and chemical products, particularly ammonia and urea, has 
become one of the most dynamic industries in Oman  over the last few years.  Value-added in the 
chemical industry (including dyes, insecticides, pharmaceutical products, fertilizers, detergents, 
perfumes, and cosmetics) increased from RO 21 million in 2000 to RO 129 million in 2006.63  The 
                                                                                                                                                                     
Corporation of the United States.  In December 2006, Suez Energy and Mubadala Development acquired Rusail 
Power Company, with a 688 MW capacity (US$500 millio n).  Additionally, the contract granted the right to 
build a new independent water and power project at Barka (Ministry of National Economy, 2005).   
60 Oxford Business Group (undated). 
61 Ministry of National Economy (2007). 
62 These figures refer to large and medium-sized manufacturing firms, with 10 employees or more. 
63 Ministry of Commerce and Industry (2006a). Oman WT/TPR/S/201 
 Page 59 
 
 
subsector represents around 13% of total value-adde d in manufacturing, accounts for about 7% of 
total employment in the sector, and has 43 firms, i. e. 9% of total manufacturing companies.  Exports 
of chemicals and chemical produc ts totalled RO 147 million in 2006 (RO 21.7 million in 2000), i.e. 
1.7% of Oman's merchandise exports.  The main e xport markets are other GCC countries, mainly the 
UAE (with over 50% of total exports in 2004) , followed by Asian countries (about 23%).64 
53. Despite recent privatizations a nd joint-ventures with foreign companies, the State continues to 
play a dominant role in manufacturing.   The Government holds 100% stake in some manufacturing companies (e.g. Salalah Methanol Company), and is an important shareholder in others (e.g. Sohar 
Aluminium Company, Oman Polypropylene Compan y, Oman Cement Company, and Oman Flour 
Mills Company).  However, some of these SOEs are in  the privatization portfolio (Chapter III(4)(iii)).  
Oman India Fertilizers Company, is a joint- venture that started operations in mid 2005
65, with an 
annual production capacity of 16.5 million to nnes of urea and 250,000 tonnes of ammonia.66 
54. The Ministry of National Economy form ulates and oversees the overall economic 
development strategy for manufacturing, while the MO CI is the implementing authority for the sector.  
Oman's main long-term objectives for the manufacturing sector include increasing its contribution to GDP to help diversify the economy away from crude  oil;  developing small and medium-sized 
enterprises (SMEs);  and creating more employment for Omani nationals. 
55. Manufacturing industries do not enjoy any specific incentives.  However, they are eligible for 
the incentives available to all companies, including:  exemption from import duties (e.g. on machinery, 
equipment, and spare parts);  five-year tax holidays, renewable for other five years;  long-term use of 
land at favourable rates in cooperation with the Publ ic Establishment for Industrial Estates (PEIE);  
subsidized electricity, water, and natural gas fo r production;  and soft loans from ODB for up to 
ten years at a low interest rate (Chapter III(4)(i)). 
56. The PEIE, established in 1993 under Sultani D ecree No. 4/1993, is managed by a board of 
directors headed by the Minister of Commerce and Industry.  It oversees the Knowledge Oasis 
Muscat
67;  six industrial estates, i.e. Rusayl;  Sohar;  Raisut;  Nizwa;  Bureimi;  and Sur68;  and the Al 
Mazuna free zone (Chapter III(3)(v)). 
57. MFN customs tariffs on manufactured goods (major division 3 of ISIC, Revision 2) average 
5.6%, with rates ranging from zero to 100%;   the hi ghest rate applies to alcoholic beverages, and 
tobacco and tobacco products, although Oman does not produce these goods (Chart IV.1). 
                                                      
64 Ministry of Commerce and Industry (2005a). 
65 The Oman India Fertilizers Company is owned by the state-owned Oman Oil Company (50% of the 
shares), Indian Farmers Fertiliser Cooperative Limited (25%), and Kris hak Bharati Cooperative Limited (25%) 
(Oxford Business Group, undated). 
66 Ministry of Commerce and Industry (2005a). 
67 The Knowledge Oasis Muscat, located 30km from Muscat, is home to 60 firms, including     
Hewlett-Packard, Motorola, Microsoft, and Oracle.   
68 The Rusayl industrial estate (inaugurated in D ecember 1985), is around 45 km from Muscat, covers 
150 ha, and has 125 industries, including foodstuff, chemicals, electrical, ready-made garments, printing press, and health products.  Sohar (November 1992), is about 220 km from Muscat, covers 333.6 ha, and has 
46 industries.  Raisut (November 1992), is around 6 km from Salalah port, and covers 103 ha, including a 
special place allocated for tannery.  Nizwa (November 1994), is  about 180 km from Muscat, covers 200 ha, and 
includes industries producing medical gloves, wooden boards, foodstuff, and ceramic tiles.  Bureimi (1998), is 
around 325 km from Muscat, and covers around 400 ha.  Sur (October 2003), is on a 14 km coastal strip in the 
Al Sharquiya region, and covers around 4,000 ha, divided into heavy and light industries (Ministry of Commerce and Industry, 2005). WT/TPR/S/201 Trade Policy Review 
Page 60 
 
 
05101520253035404550556065
311
312313314321322323324331332341342
351
352353
354
355356361362369371372381382383384385390410Chart IV.1
Tariff protection in the manufacturing sector, 2008
WTO Secretariat calculations, based on data provided by the Omani authorities.AverageMaximu m
Minimum
International Standard Industrial Classification, Revision 2
Source :311
312313314321
322
323
324
331332
341
342351352353Description
Food production
Other food products and animal feedsBeveragesTobacco manufacturingTextiles
Manufacture of wearing apparel, except footwear
Leather products, except footwear and wearing apparelFootwear, except vulcanized  rubber or plas tic footwear
Wood and wood products, except furnitureManufacture of furniture and fixtures, except primarily of metalPaper and paper productsPrinting, publishing and allied industriesIndustrial chemicalsOther chemicals, including pharmaceuticalPetroleum refineriesDescription
Manufacture of miscellaneous petroleum and coal
productsManufacture of rubber products n.e.s.Manufacture of plastic products n.e.s.Pottery, china and earthenwareManufacture of glass and glass productsOther non-metallic mineral productsIron and steel basic industriesNon-ferrous metal basic industriesFabricated metal products, except machinery and equipmentNon-electrical machinery including computersElectrical machinery apparatus, appliances and suppliesTransport equipmentProfessional and scientific equipmentOther manufacturing industriesElectrical energy354
355
356361362369371372381
382
383
384
385390410100110
105
 Oman WT/TPR/S/201 
 Page 61 
 
 
(5) SERVICES  
(i) Overview 
58. The services sector accounts for 37% of GDP.  Wholesale and retail services comprise the 
main segment (10.6% of total GDP);  followed by  education and health (7.7%);  transport and 
communications, and public administration and defen ce (6.2% each);  financial services (3.2%);  real 
estate and business activities (2.5%);  and hotels and restaurants (0.7%).  Oman is an increasing net 
importer of services;  its services trade defic it averaged US$767 million per year during 2002-06 
(Chapter I(3)(i)). 
59. Services is a crucial component of Oman's ove rall policy of economic diversification.  The 
Government is promoting the development of the sector and private-sector participation is being 
encouraged.  Nevertheless, foreign investment is still not allowed in certain services subsectors, for 
example real estate brokerage, employment placement, investigation and security, tourist guide, internal waterway transportation, a nd taxi transportation (Chapter II(5)). 
60. Several state-owned companies dominate services activities, a nd still operate under 
monopoly, or hold exclusive rights in some branches.  These include Oman Telecommunications Company, Oman Postal Company, National Transport Company, and Oman Air.  Some of these 
companies are scheduled for privatization (Chapter III(4)(iii)). 
61. Upon its accession to the WTO, Oman scheduled commitments in most main services 
categories (i.e. business, communication, construc tion and related engineering, distribution, 
educational, environmental, financial, health and related social, and t ourism and travel-related 
services) (Table AIV.2).
69 Oman does not maintain MFN exemptions under Article II of the General 
Agreement on Trade in Services (GATS).  Oman made commitments on the movement of natural 
persons as business visitors, professionals of contractual service suppliers, and as employees of juridical persons, both in the hi gher executive category (managers, executives, and specialists) and in 
the lower non-executive category.  Oman has ta bled its initial conditional offer in the ongoing 
services negotiations.
70 
(ii) Financial services 
62. Financial services contribute about 3%  to Oman's GDP.   It is a relatively small subsector, 
comprising the Central Bank of Oman (CBO);  17 commercial banks (of which ten are foreign)71;  
two specialized (fully state-owned) banks (Oma n Housing Bank and Oman Development Bank);  
six non-bank finance and leasing companies;  20 in surance firms (of which eleven are local);  
15 insurance and re-insurance brokers;  48 money exchange establishments;  20  stockbrokers;  and the 
Muscat Securities Market. 
                                                      
69 WTO document WT/ACC/OMN/26/Add.2, 29 September 2000. 
70 WTO document TN/S/O/OMN, 14 March 2006. 
71 The foreign banks are (start of operations in parentheses): HSBC Bank Middle East (1948), Standard 
Chartered Bank (1968), Habib Bank (1972), Bank Melli Ir an (1974), Bank Saderat Iran (1976), National Bank 
of Abu Dhabi (1976), Bank of Baroda (1976), State Bank of India (2004), Bank of Beirut (2006), and Qatar 
National Bank (2007).  The local banks are: Bank Muscat (1981), National Bank of Oman (1973), Oman 
International Bank (1975), Oman Arab Bank (1973), Bank Dhofar (1990), Bank Sohar (2007), and Al Ahli Bank (2007). WT/TPR/S/201 Trade Policy Review 
Page 62 
 
 
63. The CBO, created under the 1974 Banking Law and managed by a Board of Governors72, is 
the regulator of all financial services except for insurance and securities, which are under the control 
of the Capital Market Authority (CMA).73 The CBO must have a minimum capital of RO 250 million, 
and a general reserve fund equivalent to not less th an 25% of the value of currency in circulation.74 
The provisions of the Basel II capital have been implemented as from January 2007.  The CBO has 
taken initiatives to adopt risk-based supervision to  supplement the objectives of Basel II.  It is 
envisaged that the CBO would migrate to risk-based  supervision by 2008-09.  As from January 2007, 
the minimum capital requirement for banks was reduced from 12% to 10%.75 
64. According to the authorities, the deregulation of in terest rates has been one of the key features 
of financial services reforms in Oman which, in  turn, has improved the competitiveness of the 
subsector.  The CBO initiated the process in 1993,  first with the deposit, and then with the 
deregulation of lending rates, except for the personal loan segment.  In 1999, an interest rate ceiling of 
13% per year was applicable exclusively for the personal loan category.  This ceiling has been 
reduced over the years, and since April 2008, is at 8.5% per year.76 
(a) Banking 
65. Banks in Oman are well-capitalized, and have registered strong profitability in recent years 
largely as a result of positive macroeconomic c onditions, and enhanced supervision from the CBO.77 
Net profits of commercial banks (excluding provisi on and taxes) increased from RO 79.4 million in 
2004 to RO 213.8 million in 2007.  However, assets ar e concentrated among a few players, with the 
three largest commercial banks accounting for 70% of total assets, 68% of total deposits, and 69% of 
total loans at the end of 2006. 
66. In 2007, credit by commercial banks, valued at  RO 6,513 million, was distributed as follows: 
personal loans (40%);  trade (12%);  manufacturi ng (10%);  services (6%);  construction (6%);  
mining and quarrying (6%);  financial institutions (4 %);  electricity, gas, an d water (3%);  transport 
and communication (0.9%);  and agriculture and rela ted activities (0.6%).  Personal loans are mainly 
granted for consumer durables, residential housing, educational, and medical purposes.78  Interest rate 
caps are set on personal loans by the CBO, while other lending rates as well as deposit rates are 
market determined. 
                                                      
72 The two monetary authorities that preceded the es tablishment of the CBO were the Muscat Currency 
Authority in 1970, and the Oman Currency Board in 1972.  The general superintendence and direction of the 
CBO are vested in the Board of Govern ors, which consists of seven members appointed, by H.  M.  the Sultan, 
for a term of five years (renewable).  An Executive Pr esident of the CBO, appointed by Sultani Decree, is 
responsible for implementing the policies and decisions issued by the Board (CBO online information.  Viewed 
at: http://www.cbo-oman.org/). 
73 The CMA was established under Sultani Decree No. 80/1998, 
74Under Article 35 of the Banking Law No. 114/2000,  if at the conclusion  of any annual accounting 
period, the fund is insufficient to cover the losses of th e CBO for the previous year, the deficiency shall be a 
liability of the Government and shall be paid by the Government within 90 days.   
75 Central Bank of Oman (2007). 
76 Central Bank of Oman (2007). 
77 In 2001-03, the banking subsector in Oman suffered from the CBO's more stringent provisioning 
requirements following rising concerns over non-performing loans in the late 1990s.  In addition, the subsector was affected by losses from the National Bank of Oman (NBO) over 2001-03.  In mid-2005, the Commercial 
Bank of Qatar purchased a 35% stake, becoming the NBO's largest shareholder (Economist Intelligence Unit, 
2007). 
78 Central Bank of Oman (2007). Oman WT/TPR/S/201 
 Page 63 
 
 
67. The 1974 Banking Law was amended by Law No. 114/2000 and Sultani Decree No. 11/2004, 
in order to, inter alia , set limits on investment in foreign secu rities, provide a legislative framework 
for additional investment in banking activities, a nd extend the definition of banking services to 
include investment advisory services, underwriting of  securities, and hire-purchase financing.  Under 
the new legislative framework, the CBO was grante d the authority to reject candidates for senior 
positions within commercial banks, and to regulat e credit to major bank shareholders and their 
families.79 
68. Licensing procedures are the same for Omani and foreign-owned banks.  Investors must apply 
to the CBO for a licence.  Approval or disapproval of any request for authorization of a branch office 
is made by the Board of Governors.  An applicati on fee of RO 5,000 is charged for the head office, 
and RO 500 for the main branch.  Any licensed ba nk may establish and operate branch offices within 
or outside Oman.  Commercial presence is allowed in the form of wholly foreign-owned subsidiaries 
and branches of foreign banks and of  other financial service suppliers. 
69. In April 2007, the minimum paid-up capital requirement was raised from RO 50 million to 
RO 100 million for local commercial banks, and fro m RO 10 million to RO 20 million for foreign 
banks.  In principle, this measure applies to a ll new banks, but the CBO encourages existing banks to 
meet the enhanced requirement progressively.80 In addition, licensed banks are required to keep a 
paid-up capital deposit with the CBO equivalent to one-tenth of 1% of  their global banking resources, 
with a minimum of RO 50,000 and a maximum of RO 500,000.81 
70. The two state-owned specialized banks, Oman Housing Bank (OHB) and Oman Development 
Bank (ODB), have been in operation since 1977.  OHB provides finance mainly through long-term 
soft housing loans.  ODB is principally engaged in providing loans to development projects in key 
activities, such as agriculture, fisheries, livestoc k, health, tourism, and traditional industrial 
craftsmanship.  The interest rate on loans and advances charged by ODB is subsidized by the 
Government (Chapter III (3)(iv) and ((4)(i)).82  ODB also acts as agent on behalf of the Government 
in terms of: (i) distribution and collection of public so ft loans;  (ii) disbursement of amounts from the 
Agriculture and Fisheries Development Fund;  and (iii) disbursement and collection of SANAD Fund 
loans.83 
71. Non-bank finance and leasing companies (FLCs) mainly operate in three market segments: 
retail financing for individual customers for the purchase of automobiles and electronic goods;  equipment leasing for the expansion, modernizati on, and replacement requirements of SMEs;  and 
working capital financing for SMEs, as well as fact oring services associated with cross border or 
domestic trade (usually against the assignment of receivables).
84 In 2005-06, to strengthen the 
institutional and regulatory framework of the FLC, the CBO issued rules on submission of audited 
annual financial statements, and ra ised the minimum paid-up capital to RO 10 million, within a    
three-year grace period. 
                                                      
79 Economist Intelligence Unit (2007). 
80 CBO Circular BM 1019, 9 April 2007. 
81 Any bank seeking to open an additional branch in Oman must submit the prescribed application and 
plan of operations, and pay a fee of RO 500 per branch. 
82 In 2006, new financial lending limits were introduced allowing ODB to grant soft loans for up to   
RO 1 million for a single project at an interest rate of 3% per year.   The maximum limit on soft loans is 
RO 3 million to joint-stock companies that have offered 40% of their shares for public subscription. 
83 The SANAD Fund, inter alia , supports work seekers (vocationa l and craftsmen) by establishing 
individual and family self employment projects (Ministry of Information online information.  Viewed at: 
http://www.omanet.om/english/misc/omanise2.asp). 
84 Central Bank of Oman (2007). WT/TPR/S/201 Trade Policy Review 
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(b) Insurance 
72. Oman's insurance market consists of 20 direct insurance companies (there are no re-insurance 
companies), 11 of which  are local.  The number of insurance po licies issued in Oman increased from 
486,907  in 2004 to around 700,000 in 2007 (85% were car insurance) , while the value of written 
premiums rose from RO 103  million  to about RO 175 million. 
73. Under Omani Decree No. 90/2004, the insuran ce subsector in Oman is supervised and 
regulated by the Capital Market Authority, whic h took over responsibility from the MOCI after the 
market leader, Oman National Insurance Compan y, collapsed in 2001.  The minimum capital 
requirement for insurance companies is RO 5 millio n.  In 2005, the CMA joined the International 
Association of Insurance Supervisors (IAIS). 
74. Sultani Decree No. 12/1979  of 21 March 1979 (as amended) regulates the insurance 
subsector.  Some of its main provisions, recently  amended, are:  Artic le 32 no longer requires 
companies to seek reinsurance on the domestic market before going abroad;  Article 34 no longer requires companies to share up to 45% of the risk on new contracts with their competitors;  and Article 57 no longer requires government insurance-rela ted tenders to be awarded to local companies 
if they are not 10% more expensive than forei gn companies.  The insurance regulatory framework 
also includes a separate Code for Corporate Gove rnance applicable to a ll insurance companies, 
whether listed or not, and a Code of Practice fo r Conduct of Insurance Business.  The regulatory 
framework is reviewed periodically with the aim of keeping up to date with IAIS guidelines and 
standards and global best practices.  A risk-b ased solvency and capital adequacy framework for 
insurance services is under discussion.  At the GCC level, increasing the minimum capital from 
RO 5 million to RO 10 million is being discussed. 
75. New insurance companies can be established in a joint-stock form;  there are no restrictions 
regarding ownership.  An insurance company in Om an can transact general or life insurance or both, 
depending on the licence applied for and granted.  While the minimum capital requirements for single 
class and composite licences are the same, a deposit  of RO 75,000 each for life and non-life insurance 
must be made with the CMA.  Motor insurance is compulsory and may only be provided by local 
companies.  Insurance against storms, floods, and other natural disasters will be compulsory from 
June 2008. 
76. Cross-border supply of reinsurance services is fr ee from any restrictions.  Foreign insurance 
companies can currently supply direct insurance services as a locally incorp orated company or as a 
branch of the parent company.  There are no regulations on tariffs, premiums are market determined. 
(c) Securities 
77. The Muscat Securities Market (MSM) was estab lished through Sultani Decree No. 53/1988 
(as amended), and started operations  in 1989.  MSM is an independent governmental entity, in charge 
of both the regulation and the provision of ope rational facilities, and mechanisms for licensing 
trading, settlement, and registration of securities.  In November 1998, the exchange and regulatory 
functions of the MSM were separated aiming at, inter alia , ensuring stable, transparent and efficient 
capital markets.
85  The CMA, the regulator, is responsible for monitoring and overseeing capital 
market activity on the MSM.86 In addition, the Muscat Deposito ry and Security Registration 
Company, a closed Omani shareholding company, pr ovides a centralized system for registering and 
                                                      
85 Sultani Decrees Nos.  80/1998 and 82/1998.  Sultani Decree No. 18/2002 amended some of the 
provisions of Sultani Decree No. 80/1998. 
86 Central Bank of Oman (2007).   Oman WT/TPR/S/201 
 Page 65 
 
 
transferring ownership of securities and safekeepi ng records.  In March 2008, there were 128 
companies listed on the MSM, including four investment funds. 
78. In parallel with Oman's economic growth, the MSM has performed strongly over the last few 
years;  the MSM-30 index closed at 5,581.6 in 2006 (up from 2,726.7 in 2003) (Table IV.9)87, and 
reached 9,035.5 in 2007.  The ri se in the index has been accompanie d by a similar surge in market 
capitalization.  In 2007, the market capitaliz ation of the listed securities amounted to 
RO 10,273  million (up from RO 6,221 million in 2006). 
Table IV.9 
Securities market, 2002-06 
 2002 2003 2004 2005 2006 
Number of issues in the primary market 26 35 45 66 61 
Value of listed issues (RO million) 210 385 339 679 377 
Secondary market activity (RO million)      
Value of trading 231 593 759 1,407 1,128 
Number of shares traded 191.8 315.2 345.4 515.4 1,113 
Average value of trading per day 0.921 2.381 3.056 5.517 5.437 
Market capitalization 1,984 2,790 3,587 5,878 6,220 
General share price index (end-year points)a 191.9 2,726.7 3,375.1 4,875.1 5,581.6 
a The general share index base (points) was cha nged from 100 points to 1,000 points on 1 June 2004. 
Source: Central Bank of Oman (2007), Annual Report 2006 , June;  and information provi ded by the Omani authorities. 
79. In 1991, the Government of Oman started issuing development bonds through the CBO at 
quarterly auctions.  However, there have been no new issues since 2005.  The bonds are traded in the 
MSM.  Internet-based trading was launc hed in the first quarter of 2007. 
80. The MSM is open to foreign investors.  The share of foreign investors in Oman's total 
securities market investment increased from 16% in 2005 to 27% in 2007 (about half are non-GCC 
investors).  A comprehensive reform programme  was implemented recently to improve reporting 
standards of listed firms and curb insider trading.88 Some of the key aspects of the programme include 
minimum disclosure requirements for listed companies, a separate department for corporate 
governance, and advanced solvency requir ements for brokers and investment banks . 
81. In 1997, the MSM joined the International Organization of Securities Commissions (IOSCO). 
(iii) Telecommunications and postal services 
82. Oman's telecommunications network has grown considerably during the last few years: 
subscribers in the mobile market jumped from 463,000 in 2002 to 2.5 million in 2007, while the 
number of internet subscribers rose from 48,200 to 70,300 (Table IV.10).  At the end of 2007, there 
were around 268,100 fixed telephone lines in service, i.e.  a teledensity of 10.1 per 100 inhabitants (up 
from 9.2 in 2002).  The network for both fixed and ce llular telecommunications is entirely digital.  
Nevertheless, broadba nd penetration is low compared with other GCC members, mainly due to lack 
of competition, and lack of awareness by the general public.89 
                                                      
87 After an exceptional performance in 1997, when the MSM index rose by about 140%, the stock 
market went through a sustained decline until 2002.  Si nce then, the index has risen steadily, gaining almost 
30% in 2002, 40% in 2003, and 24% in 2004 (Economist Intelligence Unit, 2007). 
88 Economist Intelligence Unit (2007). 
89 Telecommunication Regulatory Authority (undated). WT/TPR/S/201 Trade Policy Review 
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Table IV.10 
Selected telecommunica tion indicators, 2002-07 
 2002 2003 2004 2005 2006 2007 
Telephone subscribers ('000) 697.0 831.0 1,056 1,598 2,088 2,768 
Telephone subscribers per 100 inhab itants 27.5 35.5 43.7 63.7 81.0 104.6 
Main telephone lines ('000) 234.0 237.0 249.3 265.2 269.7 268.1 
Main lines per 100 inhabitants 9.2 10.1 10.3 10.5 10.5 10.1 
Cellular mobile subscribers ('000) 463.0 594.0 806.3 1,333.2 1,818.0 2,500.0 
Cellular subscribers per 100 inhabitants 18.2 25.4 33.4 53.1 70.5 94.5 
Internet users ('000) 180.0 210.0 245.0 285.0 196.7 214.2 
Internet users per 100 inhabitants 7.1 8.9 10.1 11.4 7.6 8.1 
Internet subscribers ('000) 48.2 51.7 48.6 49.4 63.8 70.3 
Internet subscribers per 100 inhabitants 1.9 2.2 2.0 2.0 2.5 2.7 
Broadband subscribers ('000) 0.1 0.1 0.5 8.1 13.9 18.9 
Broadband per 100 inhabitant s 0.01 0.01 0.02 0.30 0.50 0.70 
Source:  ITU (2007), Telecommunication Indicators ;  TRA (2006), Annual Report 2005 ;  and information provided by the 
 Omani authorities.  
83. The general policy for the subsector aims to, inter alia : expand the provision of 
telecommunications services to cater for the needs of economic and social development;  set up the telecoms universal service requirements;  encourage investment in the telecommunications industry;  
introduce competition;  and safeguard and de velop Oman's interests internationally.
90 
84. The Ministry of Transport and Communication (MTC) is the policy maker for the subsector.  
The Telecommunication Regulatory Authority (T RA) was established in March 2002, under the 
Telecommunications Regulatory Act.91 In January 2003, the TRA took over the management and 
allocation of radio spectrum from the MTC.  The TRA proposes to the MTC the principles for 
determination of the services tariffs, and forward th em to the Council of Ministers for endorsement;  
once approved these are notified to TRA for implementation.92  The TRA regulates the rates for 
interconnection and access services.93 Fixed-line tariffs are set by th e operators and submitted to the 
TRA for approval;  the cross-subsidization of the pr ices of local calls by international ones has been 
gradually corrected since 2003.  Mobile prices are also set by the operators and are submitted to the TRA for approval, while interconnection tariffs are th e result of agreement betw een operators;  in case 
of disagreement, the TRA intervenes. 
85. TRA assets and income are exempt from taxes in Oman.
94  The TRA implemented a new 
numbering plan (eight-digits numbering scheme) during 2004, which is forecast to satisfy the market 
for at least the next 20 years.  A new regulatio n for domain-names registration was formulated, to 
allow domain names directly under ".om" to be al located to private-sector entities registered in the 
Oman Chamber of Commerce and Industry. 
86. Some of TRA's main objectives are to: (i) ensure the provision of telecom services 
(emergency services, public payphones, directory services, operator assistance service, maritime, and 
rural services) throughout Oman at reasonable prices and "limits";  (ii) use telecom services to 
promote exports;  (iii) ensure the optimal use of th e frequency spectrum;  (iv) safeguard the interests 
of beneficiaries and dealers with respect to pr ices of equipment and rates, quality, kinds, and 
                                                      
90 Article 3 of Sultani Decree No. 30/2002, 12 March 2002. 
91 Sultani Decree No. 30/2002, amended by Sultani Decree No. 64/2007. 
92 Article 4 of Sultani Decree No. 30/2002. 
93 Article 8 of Sultani Decree No. 64/2007. 
94 Article 19 of Sultani Decree No. 30/2002. Oman WT/TPR/S/201 
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efficiency of services provided;  (v) ascertain th e financial capability of licensees;  (vi) develop 
economic competence in the performance of licens ees engaged in commercial activities related to 
telecommunications;  (vii) prepare suitable condition s for competition among li censees, to ensure the 
provision of world standard telecom services at reasonable costs and prices, and to take necessary 
actions to enable service providers to compete ab road;  and (viii) encourage R&D in the subsector.95 
87. Any operator wanting to establish, operate, and provide telecommunications system and 
service must obtain a licence from the TRA.  Licence applications are reviewed on the basis of the 
technical and financial capabilities of the applican t, with preference given to those prepared to: 
participate in universal service provision;  compete to provide telecom services;  promote research or 
new types of telecom services;  and promote investment in the subsector.96 
88. There are three types of telecom li cences in Oman:  a "class I" licence is issued, through 
Sultani Decree97, for establishment or operation of a public  telecom network or international telecom 
infrastructure, or for the supply of public telecom services or international access services that require 
using national resources (right of way and spectrums).  The duration of the licence is determined on a 
case-by-case basis.  A "class II" licence is issued, by  decision of the Minister of Transport and 
Communication, after approval by TRA98, for the provision of public telecom services that depend on 
using the capacity of a "class I" telecom networ k and the provision of additional public telecom 
services that require exploiting the national res ources (numbering) without exploiting any natural 
resource.  The duration is determined by MTC but shall not exceed ten years.99  For private telecom 
services not connected to public network, a "class III" licence is issued100, for a duration not 
exceeding five years.101  An application fee of RO 500  is charged by TRA for examining an 
application.  Operators are required to notif y TRA of any charge (including tariffs) and  the standard 
terms and conditions.  The ch arge should be notified to the customers in the media .102  In 2007, TRA 
issued 9,288 radio  licences (compared with 5,226 in 2004) to users, and assigned 1,329 new 
frequencies (against 118 in 2004).  The licence fe es are charged in accordance with TRA Decision 
No. 46/2003. 
89. The Oman Telecommunications Company (Omantel)103, created in 1999 to replace the state-
owned General Telecommunications Organization (GTO), is by far the largest telecom company in 
Oman.  In 2004, the TRA granted Omantel two "c lass I" licences, one for public fixed services 
(RO 200,000) for 25 years, and the other for basi c public mobile general services (RO 500,000) for 
15 years.104  In mid 2005 , the Government sold  30% of its shares in Omantel (Chapter III(4)(iii)).  The 
                                                      
95 Article 7 of Sultani Decree No. 30/2002. 
96 A decision on the application should be taken within two months from the date of submission of all 
necessary documents.  In case of refusa l, the applicant is notified of the reasons for the refusal.  Article 22 of 
Sultani Decree No. 30/2002 (as amended by Sultani Decree No. 64/2007). 
97 Class I includes: basic public fixed telecom network services;  basic public mobile telecom services;  
basic public rural telecom services;  and public data networks. 
98 Class II includes: internet service provision;  audi o-text services;  short message services (SMS);  
public voice mail;  calling cards;  and other value-added services. 
99 Class I and II licences may not be amended except w ith the consent of the li censee, or for reason of 
public interest.  They may not be revoked except at the request of the licensee, or on account of a gross violation 
of any conditions of the licence on the part of the licensee, or of what is in conformity with these conditions, or 
for reasons of public interest (Article 24). 
100 Class III licences include: leased lines provision for private closed user groups;  and private telecom 
networks not connected through the public network.   
101 Article 21 of Sultani Decree No. 30/2002. 
102 Article 8 of the Price Control Regulations 2004. 
103 Omantel has been a member of ITU since 1972. 
104 Sultani Decree No. 20/2004. WT/TPR/S/201 Trade Policy Review 
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Government intends to open competition in the fi xed-line segment and end Omantel's monopoly.  In 
February 2008, the TRA published a public consulta tion paper for issuing a unified fixed licence that 
includes local, national, international, and wirele ss broadband services.  In addition, the TRA has 
initiated a process to appoint a consultant to assist in formulating the conditions of the auction and 
criteria for evaluating the applications. 
90. Under Articles 38 and 39 of the Telecommunicati ons Regulatory Act, the TRA is to float an 
open tender for licensing universal services requirement s as set up by the MTC, with subsidies to the 
incumbent to be financed by the Treasury.  If ther e are no bidders, Omantel will provide the services 
and have the right to receive subsidies for the relate d net cost as determined by the Act.  In addition, 
Omantel will continue to provi de its existing services, including  200 additional villages without 
subsidies from the Treasury.105  
91. There are two mobile phone operators in Oman: Om an Mobile, a subsidiary of Omantel, with 
57% of the market at end 2007, and Nawras Tele com, which started operations in March 2005.106  
Internet services were introduced in Oman in 1996,  while licensing for internet service providers was 
opened in June 2007.  Oman tel is the only provider of ADSL connections in Oman107;  Naswras 
provides internet through Edge technology and 3G. 
92. Postal services are under the control of Om an Post Company (OPC), a state-owned 
monopoly;  the MTC is the supervisory authority.108 There are 95 post offices in Oman.  According to 
the authorities, a restructuring of the subsector  is under way to enhance its competitiveness and 
efficiency109;  OPC is in the privatization portfolio (Chapter III(4)(iii))).  Mail is delivered to post 
office boxes not directly to the address;  the annual fee for this service is RO 15 for enterprises and 
RO 10 for individuals.110 
93. Oman became a member of the Universal Postal Union on 17 August 1971.  In 2005, to 
increase the efficiency and productivity of postal services, the GCC agreed to establish a regional 
standard with the aim of delivering 85% of the mail circulating between the GCC countries within 
four days by 2006, three days by 2007, and 90% within two days by 2008.111 
(iv) Transport 
(a) Maritime transport 
94. Maritime transport is crucial for Oman's domes tic and international trade, since some of its 
main industrial centres are on or near the sea.  Oman 's merchant fleet is relatively small, and handled 
                                                      
105 The services specified are:  to expand telecom se rvices and networks in defined areas according to 
their geographical location, or number of inhabitants, and to establish public telecom centres, including the 
installation of public payphones in these areas;  to provide maritime telecom services;  and to provide telecom services to person with special needs. 
106 Nawras Telecom was formed by TDC of Denmark,  Q.Tel of Qatar, and Omani partners (Nawras 
online information.  Viewed at: http://www.nawras.com.om/about_nawras_our_partners.shtml). 
107 In March 2007, the TRA decided to ban internet cafés from providing cheap international calls 
abroad using the voice over internet protocol (VoIP) website Skype.  The service had been much used by expatriate workers, but there were suggestions that it ha d begun to affect the market share both of Omantel and 
of the country's two mobile operators (Economist Intelligence Unit, 2007). 
108 Sultani Decree No. 48/2005. 
109 British Postal Consultancy Services provided a plan for the commercialization and development of 
postal services in Oman. 
110 Minister of Commerce and Industry (2003). 
111 WTO (2007). Oman WT/TPR/S/201 
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13,000  dead-weight tonnes (dwt) in 2006 (compared with 15,000 dwt in 2001).112  T h e  m a j o r  
reductions in cargo carried during 2001-06 were by  oil tankers and general cargo (Table IV.11). 
Table IV.11 
Shipping and maritime transport services, 2001-06 
 2001 2002 2003 2004 2005 2006 
Total merchant fleet (dwt)a 15,000 14,0000 9,000 10,000 11,000 13,000 
Oil tankers 0 8,000 1,000 1,000 1,000 1,000 
Bulk carriers 0 0 0 0 0 0 
General cargo 6,000 6,000 1,000 1,000 2,000 2,000 
Container ships 0 0 0 0 0 0 
Other 9,000 0 7,000 7,000 8,000 10,000 
Container port trafic (TEUs)b 1,331,686 1,415,498 2,264,826 2,515,546 2,727,341 2,543,284 
a Deadweight tonnes. 
b 20-foot equivalent unit. 
Source: UNCTAD (2007) , Review of Maritime Transport 2007 ;  and information provided by the Omani authorities . 
95. Oman's maritime transport is operated throug h three main ports:  Port Sultan Qaboos, the 
main commercial port, located in Muscat;  the Salalah port in the south113;  and the Sohar port on the 
Batinah coast (250 km from Muscat).114 In addition, exports of crude and petroleum products are 
routed through a terminal in Mina Al-Fahel, also  in Muscat, while the port of Qalhat, near Sur, 
specializes in LNG.  The Khasab  port in the Musandum has been extended, with the aim of 
encouraging both trade and cruise ship stops;  in September 2006, the Government signed a 
management and operations contract  for a planned dry dock at Duqum115;  and phase 1 of the Oman 
International Container Termin al officially opened in 2006.116 
96. The maritime transport subsector is overseen by the Directorate General for Ports and the 
Directorate General for Maritime Affairs (DGMA), under the MTC.  Ports in Oman are fully owned 
by the State.  Port tariffs are set up by companie s and approved by both the MTC and the Ministry of 
Finance;  port tariffs have remained unchanged since 2003.117 
97. The Port Services Corporation (PSC), a public joint-stock company under the MTC with 
35.49% government ownership, provides quay handli ng, storage, and demurrage services for all 
imported products under a contract concluded with the DGMA.  The PSC is the only supplier of these 
services, but other enterprises are eligible to ente r into a contract with the MTC.  The PSC has 
managed and operated the Port Sultan Qaboos si nce 1976 under an exclusive concession granted by 
the Government (renewed fro 25 years on January 2007). 
                                                      
112 All vessels are at least 20 years old. 
113 The Salalah port, owned by the State but under concession since 1997, is one of the few ports 
between Europe and Singapore that can accommodate S-class (world's largest cl ass) container vessels.  In 2003, 
it ranked as 34th port in the world, and handled about 2 million TEU in 2005;  capacity is expected to be 
approximately 4.5 million TEUs by 2008 (UNCTAD, 2007a). 
114 The port in Sohar took five years to construct and cost US$250 million.  It opened in April 2004, 
and is being managed by Sohar Industrial Port Company, a joint-venture between the Port of Rotterdam and the 
MTC (Economist Intelligence Unit, 2007). 
115 The contract is with Daewoo Shipbuilding and Marine Engineering, a South Korean company.  It 
will include one floating dock and two other docks, with th e facilities designed for the maintenance and repair of 
100,000-tonne hydrocarbon tankers (E conomist Intelligence Unit, 2007). 
116 The Oman International Container Terminal is equipped with, inter alia , four post-Panamax quay 
cranes, and a fleet of 15 tractors and 23 traile rs.  The second phase was completed in 2007,  and provides an 
additional 520 m quay and 28 ha area (UNCTAD, 2007a). 
117 Ministerial Decision No. 20/T/2003 of 25 March 2003. WT/TPR/S/201 Trade Policy Review 
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98. In 2006, in the context of the GCC, rules and regulations for seaports were approved to, inter 
alia: (i) bring port infrastructure, equipment, systems,  and services into accord with best international 
practices, standards, and norms;  (ii) contribute to the national social and economic objectives and to 
promote ports' competitive strengths and the GCC States' trade objectives in the global market;  
(iii) encourage the harmonization of standards, c odes, and benchmarks in the performance of port 
services, and assure that the dispatch of ships matc hes users' needs;  (iv) pursue the GCC commitment 
to promote the relevant UN Organizations (IMO and ILO);  (v) encourage private-sector participation 
in the provision of port services with a view to en suring efficient use of resources and enhancing fair 
competition;  and (vi) promote national employment , education, and life-long learning of the ports' 
human resources.118 
99. Oman is a contracting party to various intern ational/regional organiza tions and conventions, 
such as the UN Convention on Conditions for Registration of Ships (although not yet in force)119, the 
IMO, the Arab Academy for Maritime Transport, a nd the International Federation of Ports.  Oman 
participates in 20 maritime conferences. 
100. According to the authorities, no special incentiv es are granted to the subsector.  Maritime 
transport services may be provided by the private sect or (national and foreign) .  Freight and passenger 
transport charges are market determined.  Cabotage is  not allowed.  According to the authorities, the 
conditions associated with flying the Omani flag in clude:  being registered as Omani;  having a valid 
certificate;  being recognized by the International Association Classification Society (IACS);  and, for second-hand ships, being less than 50 years old.  In ternational and national safety measures must be 
maintained. 
(b) Air transport 
101. The volume of air traffic passing through Oman's airports has increased steadily over the past 
few years (Table IV.12).  Oman's main airport is  Muscat International, and there are five smaller 
airports at Salalah, Masirah, Khasab, Diba, and Sur.   In addition, oil companies operate a number of 
landing strips at remote oilfield locations, and the military has several airbases.  The construction of 
additional airports at Duqum, Sohar, and Ras-al -Hadad is being considered, while substantial 
expansions to the Muscat and Salalah air ports are due to be completed in 2012.
120  O m a n  A i r p o r t  
Management Company (OAMC) is the airport operator at Muscat and Salalah.121  In 2006, imports by 
air transport represented 9.7% of total merchandise imports. 
102. Oman's national carrier, Oman Air, is a state-owned company created in 1993.122  Comprising 
a fleet of 14 aircraft, with important expansion plans, it flew to 22 international destinations 
                                                      
118 WTO (2007).  
119 In 2007, Albania, Bulgaria, Egypt, Côte-d'Ivoire;  Georgia, Ghana, Haiti, Hungary, Iraq, Liberia, 
Libya, Mexico and Syria were contracting parties.  The Convention is not yet in force;  it requires 40 contracting 
parties with at least 25% of the world's tonnage as per Annex III to the Convention. 
120 Muscat international airport is facing saturation during the two daily peak periods (from 9 am to 
1 pm, and from 10 pm to 2 am).  A new passenger terminal, a new cargo terminal, and a new runaway are 
planned, allowing for an increase in annual visitor capacity to some 12 million passengers.  At Salalah, plans 
call for a new passenger terminal capable of handling about 2 million passengers annually, and a new cargo terminal (Economist Intelligence Unit, 2007). 
121 OAMC is owned by Bahwan Trading Company (35%);  BAA (25%);  the Government of Oman 
(20%);  ABB (15%);  and Oman Aviation Services (5%).   
122 Sultani Decree No. 52/81 of 24 May 1981.  The Government owns 82.4% of Oman Air's shares. Oman WT/TPR/S/201 
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in 2007.123  In November 2007, the Omani Government sold its 50% shareholding in Gulf Air 
(Bahrain is now its sole owner),  to further develop Oman Air. 
Table IV.12 
Air transport services, 2001-07 
 2001 2002 2003 2004 2005 2006 2007 
Passengers  2,612,916 2,314,684 2,639,813 3,131,263 3,388,804 4,521,158 4,219,700 
Arrivals 1,310,282 1,163,506 1,333,763 1,572,271 1,695,281 2,278,020 2,088,450 
Departures 1,302,634 1,151,178 1,306,050 1,558,992 1,693,523 2,243,138 1,962,777 
Transit 84,116 135,738 246,674 330,480 389,325 255,900 168,473 
Oman Air 556,347 664,597 743,938 763,304 891,163 927,343 1,174,745 
Cargo services (tonnes) 73,078 46,934 48,630 67,151 75,332 97,908 76,448 
Aircraft movements 38,955 39,555 42,330 43,622 44,408 49,901 49,806 
Source:  Ministry of National Economy (2007),  Statistical Year Book – Thirty-Fifth Issue, October.  
103. Private air carriers are allowed to operate sche duled flights from and to Oman.  Although not 
part of any major alliance, Oman Air has code -sharing agreements with a number of carriers, 
especially Gulf Air and Emirates Airlines for its tr anscontinental routes.  On the basis of Sultani 
Decree No. 93/2004, authority for approval of new ca rriers is vested in the Directorate General of 
Civil Aviation Affairs (DGCAA) under the MTC.  Th e DGCAA is responsible for air transport and 
meteorology in Oman, and enforces international agreements and conventions.  According to the 
authorities, there are, in principle, no objecti ons to allowing new entrants into the market. 
104. Oman has initiated and signed bilatera l air transport agreements with 70  countries.  
Reciprocity, in terms of capacity and frequency, ar e parameters in these agreements.  Oman has also 
initiated and signed open-skies agreements with Bahrain, Iceland, Lebanon, Jordan, Kuwait, 
Malaysia, Morocco, Thailand, Spain, UAE, and the United States. 
105. Oman Aviation Services (OAS), created in 1981 as a joint-stock company124, has exclusive 
rights to provide airport handling facilities, airline catering, and other services (e.g. ramp services) in 
Oman.  The 20-year agreement between DGCAM and OAS ended on 24 May 2001, but the ground 
handling and cargo handling concessions  were extended in June 2001, for five years.  In 2006, OAS 
secured an extension for ground ha ndling until 2010, or until the ope ning of the new international 
airport terminal at Muscat, whichever is earlier.  The catering concession was also extended, but for ten years, effective 1 January 2002.  OAS pays  7.5% of its monthly turnover received from ground 
handling revenue provided to third parties, and 5% of its monthly turnover from its catering revenue 
to OAMC as concession fee.
125 
106. According to the authorities, no special incentives are granted to the subsector.  Prices of air 
transport services are market determined, although some Oman Air routes need the approval by the 
DGCAA.  Traffic rights are allocated on the basis of Oman's bilateral agreements.  Air transport services may be provided by the private sector (na tional and foreign).  Cabotage is not allowed. 
                                                     
 
123 In 2007, Oman Air signed a letter of intent for the purchase of five wide-bodied aircraft with Airbus 
(A. 330-200);  deliveries are set to start in 200 9 ("Oman Air – Expanding in the Gulf Region", Airlines World , 
October 2007). 
124 OAS took over Oman International Services, which started operations in 1970 handling Gulf Air 
commercial airline services (Oman Aviation Services Company, 2006). 
125 A 3% catering fee is also paid by OAS to OA MC (Oman Aviation Services Company, 2006).   WT/TPR/S/201 Trade Policy Review 
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(c) Road transport 
107. At end 2006, Oman had 41,634 km of graded ro ads, of which 17, 533 km were asphalted.  In 
general, road transport in Oman is reliable, a lthough coverage in some sparsely populated areas 
remains poor because of the difficult terrain.  Oman is  working to extend road s into the interior;  
cyclone Gono affected graded road s largely in the Muscat area at an estimated cost of US$3 million.  
In 2006, imports by road transport represented 24.2% of total merchandise imports. 
108. Road transport activities are mainly regulated  by the MTC, which is responsible for, inter 
alia, urban developments, construction of highways, and road maintenance.  Given the importance of 
road transport for Oman's urban, industrial, and commercial development, the main policy goal is to 
continue widening and improving the existing road system in order to accommodate the increase in 
traffic registered in recent years. 
109. The state-owned Oman National Transport Company (ONTC), created in 1972 to provide 
school bus transport, is the main public bus and coach operator126;  there are also some private bus 
operators.  It was.  In 1984, ONTC was reformed  and enfranchised to operate public bus services 
throughout Oman.127 ONTC is included in the privatization programme (Chapter III(4)(iii)).   
110. According to the authorities, no special incen tives are granted to the subsector.  Road 
transport services may be provided by the private sector  (national and foreign).  Foreign participation 
in transport business is limited to a maximum of 70% shares.  Only Omani nationals, whose monthly 
income is less than RO 250, are allowed to operate  taxis in Oman.  Prices of road transport services 
are market determined.  Cabotage is not allowed. 
(v) Tourism 
111. Development of tourism activities is a key policy objective in Oman, as part of its 
diversification efforts.  It has a varied topography, as  well as castles, forts, and other historical sites.  
Under Oman's Vision 1996-20, investment of RO  960 million is envisaged to increase tourism's 
contribution to GDP to 3% by 20 20 (currently less than 1%).128  Moreover, the labour-intensive 
character of tourism is expected to be a source of employment.  Oman has a well-developed 
infrastructure, including high-standard hotel accommodation, consisting of over 100 hotels, with 
around 9,300 rooms (Table IV.13), as well as a range of entertainment.  Around 1.2 million tourists 
visited Oman in 2006 (783,226  in 2003), mostly from neighbouring GCC countries and Europe.129 
112. Tourism development is focused in the Muscat ar ea, with almost 41% of hotels and 46% of 
beds, including all but one of Oman's six five-star hotels.  The number of visitors is expected to 
increase as several projects, mainly tourist resort s and shopping complexes, have opened recently or 
are being constructed.130  In addition to these luxury real estat e developments, Oman is seeking to 
                                                      
126 The Government owns 99.98% of ONTC's shares (ONTC online information.  Viewed at: 
http://www.ontcoman.com/htm/history.shtml [4 February 2008]). 
127 Sultani Decree 59/1984. 
128 Central Bank of Oman (2007).   
129 In 2005, 32% of hotel guests came from GCC countries, and 24% were Europeans (Economist 
Intelligence Unit, 2007). 
130 The new US$200 million Shangri-La Resort and Spa at Barr al-Jissah opened in 2007.  It was 
developed by the local Zubir Corporation in partnership with the Omani Government, and is managed by the Shangri-La Hotel Group of Hong Kong, China.  In December 2006, The Wave, a US$779 million development 
project along 6 km of sandy coastline adjacent to Muscat airport, sold 151 villas and townhouses.  Work on 
phase one of the Blue City project (US$1.9 billion), based at Al Sawadi, has started (Economist Intelligence Unit, 2007). Oman WT/TPR/S/201 
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expand tourist attractions, through the creation of a new National Museum in Old Muscat, and eco-
tourism facilities.  Mass tourism to Oman from outsi de the region is not discouraged, but nor is it 
targeted.  The goal is to attract tourists with hi gh levels of expenditure through the introduction of 
new tourist projects with longer stay periods.  To facilitate tourism, the visa application process has 
been eased.  Some hotels have been included in the privatization programme (Chapter III(4)(iii)). 
Table IV.13 
Tourism main indicators, 2001-07 
 2001 2002 2003 2004 2005 2006 2007a 
Hotels 115 124 133 147 161 173 190 
Rooms 5,729 6,078 6,473 7,045 8,132 8,563 9,298 
Beds 8,625 9,208 9,809 10,919 12,575 13,417 14,665 
Room occupancy average 42 41 43 47 47 46 51 
Income (RO million)  46.1 45.7 48.3 59.3 78.6 106.8 85.1 
a Up to September . 
Source: Ministry of National Economy (2007),  Statistical Year Book – Thirty-Fifth Issue ;  and information provided by the  
 Omani authorities. 
113. Underscoring the Government's interest in t ourism, the Ministry of Tourism (MT) was 
established in mid 2004 under Sultani Decree No. 61/2004.  The MT  replaced the Directorate General 
of Tourism (DGT) at the MOCI as the body responsible for, inter alia : developing tourism through 
the preparation of plans and programmes;  regula ting and supervising all relevant agents in the 
subsector, including the introduction and application of a system of hotel classification, categorizing hotels, and tourist offices;  and granting licences. 
114. Foreign individuals and companies are barred from owning property unless the land/property 
falls under Integrated Tourism Complexes (ITC) regulations on the basis of Sultani Decrees 
Nos. 12/2006 and 65/2007.  A company, whether Omani or foreign, may apply to the Ministry of Housing to lease land with freehold interest in general for 25 years, or 50 years for ITC and similar projects. 
115. Under the Foreign Capital Investment Law, fo reign investors may own up to 70% of total 
equity in the tourism subsector.  Nonetheless, th is can be raised to 100%  in case of "strategic" 
projects.  Some tourism activities, such as touris t guide services, are reserved for Omani nationals 
(Chapter II(5)). 
116. The Government is active in the tourism s ubsector, including financ ing new and expansion 
projects through soft loans (Chapter III(4)(i)).  Acco rding to the authorities, the Government grants 
tourism-related investment incentives following a feasi bility study, and provided the project is in line 
with the overall vision of the country.  Although there is no official taxation system for the subsector, 
all hotel bills include a 4% tourism tax and a 5% municipality tax.   Oman WT/TPR/S/201 
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