Oman's A1 foreign and local currency government bond ratings and stable outlook balanced its considerable financial strength against long-term structural economic challenges, Moody's Investors Service said in its latest annual report on "Credit Analysis: Oman" posted on its website. It said the country has a robust external payments position and public finances. ''But Oman also has much smaller oil and gas reserves than the other five GCC member states and it is heavily dependent on oil and gas, which account for around 90 percent of government revenue. Oman's economic risk is therefore its vulnerability to fluctuations in oil prices. ''Nonetheless, the effects of large fluctuations in oil prices are buffered to a certain extent by the government's ample fiscal space for countercyclical policies, which in large part stems from its low debt level.'' Enhanced oil recovery (EOR) techniques have also extended the life of Oman's oil fields, but its crude oil reserves amount to only 16.9 years of current production levels, much shorter than the other major GCC oil exporters. Oman's natural gas reserves are, however, more bountiful, with reserves equal to 36 years of current production levels, ratings agency said. ''The government has ramped up spending recently to address social welfare needs and concerns, yet Oman's breakeven fiscal oil price has risen only slightly from its 2008 level. However, at an estimated $77 per barrel, Oman's fiscal breakeven oil price is one of the highest in the GCC.'' Moody's noted that while the budget is likely to remain in a sizable surplus this year and next year, public expenditures would be constrained if oil prices fell sharply and the budgetary breakeven oil price were to rise significantly from its current level. Meawnhile, among the countries in the Middle East and Africa (MEA) region, Oman reported the largest expected room growth at 81.2 percent if all 5,417 rooms in the country's total active pipeline open, said STR Global in its July 2012 report. And the latest statistics released by Oman's National Center for Statistics and Information revealed that the total number of guests in the sultanate's four- and five-star hotels rose by 24.6 per cent in the first half of this year to 321,500 compared to 258,000 in the same period last year. The data showed that hotel revenues increased by 13.4 percent to RO52.7 million in the first half of this year from RO46.5 million in the corresponding period of the previous year. Saudi Gazette
