The United Kingdom remains the leading foreign investor in Oman, accounting for over 50% of all Foreign Direct Investment (FDI) in the sultanate, according to recent data from the National Centre for Statistics and Information (NCSI). UK investments in Oman now exceed $35 billion, demonstrating a shift beyond the traditional oil and gas sector into diverse industries aligned with Oman Vision 2040.
Growth and Diversification of UK Investments
UK investments in Oman have been on a sharp upward trajectory, with FDI increasing by $5 billion in the 12 months leading up to September 2024. Since the signing of the UK-Oman Sovereign Investment Partnership (SIP) in January 2022, total UK FDI in Oman has surged from $23 billion to $35 billion. This growth accounts for 17% of all-time global FDI in Oman within just three years.
The nature of UK investments has also evolved, with increasing focus on non-oil sectors. Significant developments include:
- Telecommunications: FTSE 250 company Helios Towers invested $500 million into Oman’s telecom infrastructure in 2022.
- Mining: UK-based Knights Bay secured Oman’s first international mining concession in 2023.
- Green Energy: Five out of eight mega green hydrogen concessions awarded by Hydrogen Oman (Hydrom) in 2024 involved UK investors, each potentially injecting up to $5 billion into Oman’s economy.
Job Creation and Skills Development
UK investments are also generating employment opportunities across Oman, often exceeding local Omanisation requirements. Many UK firms collaborate with Omani educational institutions, contributing to skills development in emerging industries such as renewable energy and advanced technology.
Expanding UK-Oman Business Ties
Beyond energy and infrastructure, UK businesses are increasingly involved in:
- Education: A surge in British-branded schools opening post-pandemic, fostering long-term educational collaboration.
- Tourism: The UK remains one of the top sources of tourists to Oman, with growing interest in heritage and adventure tourism.
- Advanced Technology & Manufacturing: Investment in Oman’s free zones and deep-sea ports is driving growth in green manufacturing and space technology.
Omani Investments in the UK
Omani investors have also diversified their portfolios in the UK, moving beyond real estate to strategic sectors such as research and development. Notably, the Oman Investment Authority has invested in Oxford Science Enterprises, an incubator linked to Oxford University, fostering high-tech intellectual property that could benefit Oman’s economy in the long term.
Bilateral Trade and Future Outlook
The UK and Oman have surpassed pre-pandemic trade levels, with total bilateral trade reaching $2 billion by September 2024. UK exports to Oman accounted for $1.5 billion, while Omani exports to the UK stood at $0.5 billion, highlighting Oman’s growing presence in the UK market.
Looking ahead, the UK-GCC Free Trade Agreement (FTA) is expected to further boost trade and investment between the two nations. UK government projections estimate that a successful FTA could increase bilateral trade by 16%, fostering growth in sectors such as green energy, manufacturing, and advanced technology.
With strong economic ties and ongoing collaboration, UK-Oman relations continue to strengthen, paving the way for sustained investment and job creation in key sectors beyond oil and gas.
(Source: Muscat Daily)
