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FDI inflows to Oman exceed $1.6 bln in 2013 - UNCTAD

FDI inflows to Oman exceed $1.6 bln in 2013 - UNCTAD
Foreign direct investment (FDI) inflows to the Sultanate of Oman stood at $1.62 billion in 2013, compared to $1.04 billion a year earlier, registering a 56% surge, revealed a report by the United Nations Conference on Trade and Development (UNCTAD), reported Muscat Daily.

Despite the 56% growth, FDI inflows to Oman remain below their level of $2.95 billion in 2008, noted UNCTAD’s World Investment Report 2014, released on Tuesday, adding that FDI outflows from Oman, however, leapt by 58% from $877 million in 2012 to $1.38 billion in 2013.

UNCTAD’s report highlighted the new challenges faced by the Gulf Cooperation Council (GCC) petrochemicals industry due to the shale-gas revolution in North America, which, the report says, is affecting FDI patterns.

GCC governments have embarked, since the mid-2000s, on the development of large-scale petrochemicals projects in joint ventures with international oil companies.

“These efforts have significantly expanded the region’s petrochemicals capacities. And they continue to do so, with a long list of plants under development, including seven mega-projects distributed between Saudi Arabia, the UAE, Qatar and Oman (Liwa plastics project). The industry has been facing new challenges, deriving among others from the shale-gas production under way in North America, which has affected the global strategy of petrochemicals transnational corporations,” UNCTAD said.

“The shale-gas revolution in North America, combined with gas shortages in the GCC region, has reduced the cost advantage of the GCC petrochemicals players and introduced new competition. The global petrochemicals players, that have engaged in several multi-billion dollar mega-projects in GCC countries in the last ten years, have been considering major projects in the US. Petrochemicals producers in the Middle East should nonetheless build on this experience to develop a strategy of gaining access to key growth markets beyond their diminishing feedstock advantage,” UNCTAD stated.