Asenior official at Oman's Ministry of Oil and Gas said persistently lower oil prices are expected to affect the cost of services related to the oil and gas sector, according to Times of Oman.
"We expect that with reduced oil prices the (cost) of services will also be reduced," Salim Nasser Said Al Aufi, undersecretary in the Ministry of Oil and Gas, told journalists yesterday.
However, the effect will not be immediate, he said on the sidelines of the agreement signing of Oxy Oman with two small and medium enterprises (SMEs).
"If the oil prices continue to come down, providers of various services in this sector, such as drilling, logistics and supply of chemicals, will have to reduce their costs, otherwise they will be "writing themselves out of business," noted Al Aufi.
Asked if any effect on services will have an impact on the level of production, the official said, "I do not think so. I think if the cost of the services comes down at a reasonable rate, then we can continue the same level of activity."
In addition, the undersecretary said that current low oil prices will not affect any of the ongoing projects under the control of the Ministry of Oil and Gas. "The projects we have control over are all screened at (the oil price of) about $65-70 (per barrel), so we are still okay," he said . "We will continue our activities, but that does not mean that we do not need to go back and have a relook at all the projects that we are about to execute. Nothing that we are executing today will stop," said the undersecretary.