Oman has announced its draft budget for 2011, projecting a budget deficit of $850 million, Omani Minister of National Economy Ahmed bin Abdul Nabi Mecki has said, according to Beltone Financial.

The 2011 budget projects revenues to reach $18.9 million, 14 per cent higher than in the 2010 budget, with oil revenues standing at $12.8 million, and gas revenues of $2.3 million. Spending is expected to reach $ 21.1  million in 2011, nine per cent higher than that of 2010 on the back of increased planned development and infrastructure projects.

Oman approved in 2007 a $10 billion development programme for its oil and gas sectors, whose implementation started in 2008. In its 2011 budget, it based oil revenues on a production level of 896,000 barrels per day (bpd), 26,000 bpd higher than the production level in the 2010 budget.

Oman plans to increase its production to 900,000 bpd in 2011, and then to one million bpd by 2012. It drafted the 2011 budget on an oil price of $58 per barrel, higher than the $50 per barrel used in the 2010 budget, on the back of projected increased confidence in oil prices over the coming year.

The country plans to cover its budget deficit through a $700 million withdrawal of reserves, and a $389.6 million worth domestic development bond issue.