Oman cuts 2020 budget by $1.3 billion: ONA

Dubai — Oman has reduced its 2020 state budget by 500 million Omani riyals ($1.3 billion), after directing all ministries to reduce development and operating budgets by 10%, according to state-run news agency ONA.

The decision to make deeper cuts than the 5% reduction announced last month follows tumbling crude demand and prices due to the coronavirus pandemic.

Oman's minister for oil and gas, Mohammed al-Rumhy, previously told S&P Global Platts that any cuts to Oman's hydrocarbon sector are unlikely to impact producing assets, and will instead be focused on exploration and infrastructure projects.

Oman is already heavily burdened by debt, and is one of the most exposed countries in the Gulf Cooperation Council to low oil prices. Its sovereign creditworthiness is deemed to be in junk territory by ratings agencies S&P Global Ratings, Moody's and Fitch.

Under the newly brokered OPEC+ agreement that will see members take 9.7 mb/d out of the market, Oman will slash its May and June production by 23%, equating to 201,000 b/d. Its new quota is 680,000 b/d. Oman is part of the new and old OPEC+ cuts and has a production capacity of about 1 million b/d.