Muscat, Oman – Oman’s journey toward a sustainable energy future is gaining momentum, with the first Final Investment Decision (FID) on a green hydrogen (GH2) project expected in 2026-27. The decision will be made by one of the consortiums selected to develop large-scale GH2 initiatives in the Sultanate.
Over the past two years, Oman has allocated land to eight consortiums, enabling investments in expansive green hydrogen projects in the central and southern regions. Collectively, these projects aim to produce at least 1 million tonnes of green hydrogen by 2030, reinforcing Oman’s commitment to a low-carbon energy transition.
Speaking at the ‘Together We Progress’ forum, hosted by the General Secretariat of the Council of Ministers, Eng. Salim bin Nasser al Aufi, Minister of Energy and Minerals, emphasized that securing the maiden FID is a crucial milestone, ensuring Oman’s green hydrogen ambitions remain on course.
Navigating Global Energy Shifts
The announcement comes at a time of shifting global energy policies, with some nations revising their clean energy commitments. Notably, the United States has signaled a scaling back of its renewable energy goals, while energy giant BP recently announced a strategic “reset” in its transition toward renewables.
Despite these global headwinds, Oman remains steadfast in its energy strategy. Al Aufi reaffirmed the country’s intent to continue oil production, provided that production costs remain competitive in the global market. With private sector investments driving Oman’s oil and gas sector, the government has largely avoided the financial burden of hydrocarbon expenditures.
Renewable Energy Expansion
Oman’s renewable energy sector continues to show promise. In 2024, renewable electricity accounted for an average of 9% of the country’s total power consumption, peaking at 32% on certain days. The government aims to raise this figure to 30% annually by 2030.
Wind Power Projects on the Horizon
Further bolstering Oman’s clean energy infrastructure, four new wind-powered Independent Power Projects (IPPs) are set to be awarded this year. These projects will significantly enhance the nation’s renewable energy capacity and diversify its power sources.
Revitalizing Oman’s Minerals Sector
Oman’s minerals sector is also undergoing transformation, driven by a new investment strategy that governs mineral exploration and extraction. The policy distinguishes between concession areas for metallic minerals and general sites for non-metallic minerals and construction materials.
The Minister highlighted the significant progress made under this strategy, particularly through Minerals Development Oman (MDO) in collaboration with the Oman Investment Authority. Previously, mining permits were limited to small areas (under 5 km²) and allowed extraction of only one mineral. The updated framework now grants exploration rights for 5-6 years and investment rights for 25 years.
This approach has already yielded positive results, including Oman’s first copper concentrate exports in over a decade, signaling strong investor interest in the sector.
Gold Deposits and Economic Viability
Addressing questions about gold deposits associated with copper reserves, Al Aufi clarified that the extraction and refining costs outweigh the potential benefits. Instead, the gold remains embedded within copper exports, enhancing their overall value.
With Oman pressing forward on multiple energy and mineral initiatives, the country is positioning itself as a key player in the global green energy transition while ensuring economic sustainability in its traditional sectors. The anticipated $100 million investment in green hydrogen and the expansion of renewable energy and mining projects highlight Oman’s balanced approach to innovation and resource management.
