Muscat - Oman and the UK have strong economic ties, which deliver thousands of Omani jobs, growth and prosperity.
About 47 percent of all foreign direct investment into Oman is British, with the energy sector playing a vital part. British flag-bearers BP and Shell – and a whole ecosystem of UK energy companies, including SMEs from across the UK – heavily contribute towards a sector that underpins 77 percent of Omani state revenue.
COP26 and COP27 have shown how energy is changing; and Oman is surging ahead as a regional leader in this field. Last month’s second Green Hydrogen Summit in Muscat brought together leaders in every aspect of the hydrogen value chain from production and transportation to applications and storage. Spearheaded by the Omani government, the Summit demonstrated the Sultanate’s ambition to be a global leader in green hydrogen.
Oman’s renewable energy potential stems in large part from its enviable location. With strong sun, fierce winds and abundant space, located near strategically located shipping ports for future exports, Oman will only have to allocate 0.1 percent of its landmass for renewable energy to support its own future energy requirements, making energy exports key.
Vision, innovation and collaboration are also key to success, and the Sultanate’s plans to build a hydrogen-centric economy by 2040 hold significant opportunities for partnership between our two nations.
Three factors drive the potential for this UK/Oman collaboration: the strength of the UK’s policy framework, renewables ecosystem; and Government export financing.
Low carbon hydrogen is the UK’s new home-grown super-fuel and it will be vital for our own energy security, in order to meet the legally binding commitment to achieve net zero by 2050.
Last year the UK government doubled the UK’s 2021 hydrogen production ambition to up to 10GW, by 2030. This places the UK firmly at the forefront of the global race to develop hydrogen. As hydrogen provides a secure, low carbon replacement for fossil fuels, it enables the transition to a greater energy security and of course to reach our net zero targets.
Green energy goals cannot be achieved in a vacuum, work needs to be done with partners around the world to reach global solutions.
‘New Energy Oman’ conference was held at at Mansion House in London in July last year with the presence of Abdulsalam Al-Murshidi, Qais Mohammed Al Yousef and senior representatives from OQ, PDO, Hydrom and many more. Over 250 UK institutional investors and energy companies had joined the event from every corner of the UK. These companies see the opportunity in Oman and are keen to hear about the hydrogen opportunities on offer. Many of these attendees visited Oman for the British Embassy’s Energy Trade Mission last October, and December’s green hydrogen summit.
The UK-Oman Sovereign Investment Partnership, signed almost one year ago, has provided the springboard to diversify and keep increasing bilateral investment, to support prosperity and quality jobs across every corner of both our countries.
One critical element to unlocking Oman’s renewables potential is finance. Through the UK’s export credit agency, UK Export Finance, the British Government has the potential to play a catalytic role in this area.
UKEF is emerging as a pioneer export credit agency for sustainability. Last year, UKEF was the ECA which provided the most financing for sustainable deals, with £3.6bn provided for sustainable projects. It was recognised as the top ECA for sustainable financing, according to an independent ranking.
UKEF recently launched a new mission statement which puts sustainability at the heart of its agenda, and revealed an ambitious suite of new emissions reduction targets.
With an already strong partnership with Oman, and a track record of financing strategic projects here, it is expected to see UKEF emerge as a key participant in supporting major deals in Oman’s renewable energy and clean growth space.
In summary, the UK recognises that partnership, collaboration and co-investment hold the keys to a greener and more sustainable future for Oman and the UK; and the UK’s offer will continue to support new jobs, growth and prosperity across Oman and the UK. The Trade and Investment team at the British Embassy Muscat are primed and ready to drive this forward – onwards we go.
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