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Building a Nation with Energy: Oman’s Journey with Natural Gas

Building a Nation with Energy: Oman’s Journey with Natural Gas

  • Bruno Chicalia • Partner, CTJ Consultoria

“History does not repeat itself—but it can rhyme if we are poets of our own destiny.” This is the journey of a Mozambican engineer to the heart of the desert and how it can inspire us.

“When I first saw Sur, in the 1990s, it was a fishing village. A small line of white houses, shacks, wooden boats stranded on the sand, and a road that looked more like a dry goat trail. But Sultan Qaboos decided: ‘This is where we will build the future.’ And right there, we witnessed a miracle happen.”

The voice of engineer José Silva Pereira, now 79, still carries the energy of someone who knows he lived a story few get to tell. Sitting in the shade of a balcony in Maputo, gazing at the Indian Ocean, he smiles serenely as he recalls the hot days of the Middle East when natural gas was just a promise and Oman was a country that believed more in the future than the present.

A Mozambican in the Desert

Born in Chiveve, Mozambique, José earned a degree in Chemical Engineering before starting his career with Sasol, the South African state-owned oil company. In 1982, he obtained an MBA from Universidade Nova de Lisboa, and in 1983, he arrived in the Middle East for the first time, in Abu Dhabi, representing Partex—the oil arm of the Calouste Gulbenkian Foundation. He joined GASCO, a company handling associated gas recovery and conversion, which until then had been flared in the desert. It was the beginning of a long journey at the heart of the oil and gas industry.

“It wasn’t easy. But it was fascinating. Countries in the region were reinventing themselves, and I had the privilege to be part of it.” In 1995, the call came: Oman wanted to build its first natural gas liquefaction plant. José was appointed to the board of the newly established Oman LNG with a clear mission: launch the project and train young Omani graduates to take leadership roles within five years. “At the time, I thought: this is valuable. But is it possible? One of the graduates I recruited is now the COO of Oman LNG.”

Sur: Where It All Began

Sur was then a fishing village with minimal infrastructure. Three locations were considered for the plant, all on the coast, about 350 kilometers from the gas reserves inland. Sultan Qaboos, with bold vision, chose Sur.

“He wanted to bring development to where there was nothing. He wanted territorial balance. He chose the most difficult place—and he succeeded.”

“I remember seeing the sign ‘Pizza Hut – coming soon’ hanging on a shack in Sur. At the time, it seemed surreal. But today I understand that the sign symbolized something greater: a country believing in its future and creating opportunities where once there were only dreams and sand,” José recalls.

Oman LNG and Transformation

Oman LNG was created by royal decree in 1994 as a joint venture with a dominant state stake (51%) and private participation (Shell 30% as operator; Total, Partex, Korea LNG, Mitsubishi, Mitsui, and Itochu), with 80% of the initial investment financed by banks—demonstrating the credibility of the project. This model ensured national control and international acceptance. Oman focused on controlling the value chain from extraction to LNG liquefaction and export, maximizing value and building strong domestic capabilities.

The transformation began: the village gained hospitals, schools, and hotels. The road connecting Muscat to Sur had two options: a 300 km paved inland route or a shorter 200 km dirt road prone to flooding. Today, a modern highway exists, allowing access to tourist attractions like Oman’s famous sinkhole. “Suddenly, Sur was not just on the map—it was at the heart of the national economy.”

Building More Than Infrastructure

What impressed José most wasn’t the buildings or millions in investments—it was the commitment to people. “There was resistance. Fishermen said we’d destroy their livelihoods. We dialogued. We invested. We rented homes to locals, renovated them, built modern communities attracting trade, services, institutions, and small industries. It was a human-centered development process with social consultation.”

He proudly recalls: “Fifteen years later, the same fishermen were fishing near the plant’s quay. There was more fish; it was no longer just fishing—it was business, export, dignity.” He laughs: “But we had to make them fish without smoking, because near an LNG loading quay it’s unsafe.” Investments were made in rural credit, coastal infrastructure, and professional fisheries management to strengthen local production and support exports.

A Foundation for the Future

Since the first LNG export in 2000, shareholders committed 1.5% of annual net profits to social and sustainable development—20–25 million USD per year. Half was allocated to social projects, the remainder to a reserve fund.

In 2015, the Oman LNG Development Foundation was created—a perpetual foundation with over 200 million USD from the reserve fund, dedicated to investing in society even after the plant’s eventual closure.

“This moved me deeply. It wasn’t philanthropy—it was visionary. Intergenerational investment, a desire to change the status quo of a mostly poor population.”

Today, the foundation supports over 4,000 social projects: equipped schools, teacher training, clinics, health campaigns, rural development, and even a cheese factory in Salalah with European techniques—all funded by LNG revenues.

During LNG plant construction, Oman LNG financed an 80 million USD hospital in Sur, including training local staff for high-level care. Local content programs ensured Omanis led the future—not just served it.

Diversification: Fertilizers, Tourism, Industry

With gas as the engine, Oman diversified. OMIFCO, a modern urea and ammonia plant, was created with multiple partners, using domestic gas while promoting manufacturing and industries like agriculture.

“Job creation, exports, innovation—it was intentional.”

Tourism was boosted with infrastructure, culture, and environmental investments. The banking sector supported local entrepreneurs in value chains. Logistics became a pillar: modern ports, roads, and integrated industrial zones. SOHAR Port & Freezone attracted clusters in metallurgy, petrochemicals, and food industries.

National policy mandated minimum Omani employment percentages (75–95%), fostering local workforce development. Renewable projects like Miraah provide solar thermal energy for oil extraction and LNG liquefaction, reducing fossil gas use. The Marsa LNG project, led by TotalEnergies, will be fully solar-powered, positioning Oman as an LNG bunkering hub.

Vision 2040 coordinates national efforts across economy, culture, and governance, aligning energy, industrial, and service sector investments.

“It was a systemic vision. Everything connected, everything purposeful. Gas was the trigger, but the goal was comprehensive development.”

See Also

Mozambique on the Cusp of History

With gas reserves seven times larger than Oman’s, Mozambique is, according to José, “where Oman was 35 years ago—but with greater potential.” Palma could be the new Sur—if the country has the vision to act differently for itself and its people.

“The first step? Train Mozambicans. Invest in youth. Bring technical universities, training schools, and exchange programs. We must prepare the generation for the gas era and beyond.”

“The second step is governance: transparency, strong institutions. It’s inevitable. Without this, gas could become a disguised curse, leaving the country poorer despite its ‘wealth.’”

“Finally, territorial vision. Palma cannot grow alone. Development must extend across Cabo Delgado, Nampula, Niassa. Growth must be shared nationwide.”

José Silva Pereira does not speak nostalgically—he speaks with a mission.

“What makes me proudest is not the titles—it’s knowing I was part of something that bore fruit, that changed lives.”

If Oman inspires Mozambique in one way, it is that natural gas, if used wisely, can build not just highways and factories—but dreams, dignity, and a future.

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