Muscat – The United Kingdom remains the largest investor in Oman, accounting for over 50% of all Foreign Direct Investment (FDI) stock in the sultanate, according to the latest statistics from the National Centre for Statistics and Information (NCSI). In an exclusive interview with Muscat Daily, Michael Eyley, Director of Trade and Investment at the British Embassy in Muscat, discusses the increasingly diversified nature of UK investment, how it is generating jobs across Oman, and its role in supporting Oman Vision 2040. This comes against the backdrop of ongoing UK-GCC Free Trade Agreement negotiations.

What are the current trends in the UK’s investment in Oman, which sectors are seeing the most growth, and how does this align with Oman Vision 2040?

Firstly, thank you for giving me the opportunity to talk about how central investment, growth and jobs are to the UK-Oman relationship. It has been a personal privilege to experience Oman’s traditions and growth over the last few years – and our shared prosperity has never been stronger. The key business statistic that I always start with is that the UK is the largest investor in Oman, accounting for over 50% of all FDI stock in the sultanate: the UK invests more in Oman than the rest of the world combined. This is now worth over $35bn. Both statistics are huge – but I feel they do not communicate the full impact. There are three key trends I want to unpack: this investment is growing rapidly; it is diversifying away from oil and gas; and it is generating jobs across Oman in dynamic growth sectors.

On the first trend – investment growth – there is often a perception that UK investment in Oman is legacy oil and gas investment; but the latest Omani figures prove otherwise. UK FDI grew by $5bn in the 12 months to September 2024; and since the UK and Oman signed a Sovereign Investment Partnership (SIP) in January 2022, UK FDI has grown by $12bn, rising from $23bn to the $35bn. These are huge numbers:  put another way, 17% of the total, all-time global FDI in Oman has come from just the UK in the last three years.

On the second trend – investment diversification – the 2022 SIP committed the UK and Oman to diversify investment; and since then, we are seeing repeated UK involvement in priority Oman Vision 2040 sectors. My favourite examples: in 2022, FTSE 250 company Helios Towers invested $500mn into Oman’s telecommunications network; in 2023, UK firm Knights Bay was awarded Oman’s first ever international mining concession; and by 2024 (and a statistic I am very proud of), five out of eight of the mega green hydrogen concessions awarded by Hydrogen Oman (Hydrom) involved UK investors – if these projects reach a positive final investment decision, each individual concession could commit $5bn of investment into Oman. These are just a selection of recent examples – and a theme amongst them is not just diversity of sector, but diversity of location across Oman.

On the third trend – investment creates jobs – the evidence speaks for itself. Many UK investors have huge Omanisation rates – often far larger than mandatory requirements, because of the superb quality and quantity of applicants. The synergy between many UK and Omani training establishments and qualification frameworks supports this. And often jobs are created before the investment flows: take green hydrogen; it will take several years for investment to be fully implemented as projects scale up, but jobs were created before the first rial was invested. So even though current UK statistics looks great – the future pipeline looks even better.

Beyond the investment areas you mention above, where else are UK companies showing interest in Oman?

For me this comes down to two areas: growing our people-to-people links, and supporting Oman’s competitive advantages.

On people-to-people links, booming education and tourism are great examples. Everyone in Muscat will have seen the surge in British-branded schools opening in Oman post-COVID, often through partnerships between Omani entities and UK educational institutions. This builds on the significant, long-standing vocational and technical qualification links between Omani and UK institutions – including the presence of the British Council in Oman. On tourism, the UK is consistently amongst the top two or three sources of tourists to the sultanate – and the UK’s tourism ecosystem is working with Oman’s to develop new areas, particularly heritage and adventure tourism. The latter is attracting new Brits to visit Oman. This is critical, as a huge number of UK business leaders that I meet during their trips to Oman – often at Oman Convention and Exhibition Centre (OCEC) business conferences – mention that their first experience of Oman was as a tourist on holiday. This crafts their first impression: one of hospitality, tradition, purpose, and – of course – unbelievable natural beauty.

On competitive advantages, I am referring to the areas where Oman’s hard assets stand out within the GCC to UK businesses. There is no permanent list, but three key super sectors pop up repeatedly: green energy – backed by scientific data priming Oman as one of the world’s best locations for green hydrogen (plus the excellent Hydrom orchestrating developments); freezones and green manufacturing – backed by excellent deep-sea ports, structures, and proximity to future green hydrogen hubs; and advanced tech – backed by world-class data and energy infrastructure, and geographical conditions for space launches.

UK companies are now heavily involved in all three areas, generating new jobs across the sultanate. Another aspect that stands out for these areas is the maturity and strength of the regulatory frameworks – something which the UK is proud to have been supporting for several years, as part of our government economic dialogue (Strategic Advisory Group) where UK expertise (and the lessons we have learned from our own attempts) are shared directly with the Omani government.

How do Omani investors or businesses perceive investment opportunities in the UK market, and in what ways are they currently investing in the UK economy?

The UK has always been a key market for Omani investors seeking to diversify their portfolios. Historically, Omani investment in the UK focused on real estate, but in recent years, there has been growing interest in strategic investments that maximise the UK’s research capabilities. The UK is home to four of the world’s top 10 Universities. A great example is the Oman Investment Authority’s investment in Oxford Science Enterprises, an incubator linked to Oxford University. This investment is maturing, with the incubator now producing high-tech intellectual property (IP) which Oman owns a share of. The potential for these companies to establish manufacturing operations in Oman and bring their innovations back home is significant. In future, we expect future Omani investment into the UK to support Oman’s supply chain and ecosystem planning for major new industries, like green hydrogen and space; particularly into the UK’s leading early-stage, world-class research and development capabilities.

Could you provide an overview of the current level of bilateral trade between the UK and Oman? What were the figures at the end of 2024, and how have trade trends evolved since the COVID-19 pandemic?

We have long surpassed pre-pandemic levels of bilateral trade. The total value for bilateral trade for the year ending September 2024 was $2bn – with the UK exporting $1.5bn and Oman exporting $0.5bn. Only a tiny percentage of this is oil and gas – with broadly a 50-50 split between goods and services, demonstrating the dynamism of our trade. The growth in Omani exports to the UK is super exciting: it represents 25% of bilateral trade, which is huge, given the UK’s population is over 15 times larger. Oman Chips are popping up across shops all over the UK – and underneath the surface, Omani-made cabling is literally keeping our lights on! One of the historic drivers of UK-Oman trade has been the UK’s fantastic export credit agency, UK Export Finance (UKEF). They retain a country allocation of almost $5bn for Oman – one of the largest in their global network.

How do you see the UK-GCC FTA impacting Oman-UK bilateral trade?

The elephant in the room! The FTA negotiations are ongoing – and although I cannot reveal too much – the prospects are very exciting. The UK government calculations estimate that a successful Free Trade Agreement would increase bilateral trade by 16% – and given the huge impact of the UK-Oman SIP just three years after signing, I am confident that Oman could secure its fair share of the benefits from a successful FTA. Three areas of impacts stand out: firstly, the compatibility between our economies – overlap is minimal, so growth and job creation can be evenly distributed – including more world-class UK products on shop shelves! Secondly, the potential of Oman’s freezones from Duqm, Sohar, Salalah and beyond will drive growth in green manufacturing, including downstream applications – particularly if Oman successfully signs further FTAs or CEPAs with markets like India. Thirdly, the potential for the UK’s world-class research and advanced manufacturing to support growth and job creation – particularly across the three key super sectors I discussed earlier.

The fact that the UK’s Minister for International Trade chose to visit Oman (in September 2024) as part of his first international trip anywhere in role speaks volumes about the future possibilities.

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