OMAN: OIL SYSTEM VULNERABILITY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00287R000600470001-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 9
• Document Creation Date: December 22, 2016
• Document Release Date: May 12, 2010
• Sequence Number: 1
• Publication Date: March 25, 1983
• Content Type: MEMO

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Central Intelligence Agency
Washington, D. C.2050s
DIRECTORATE OF INTELLIGENCE
,(j ~ .~4~4ii1'~ t,.
MEMORANDUM FOR: James A. Blaker
Deputy Assistant Secretary for International
Energy and Economic Affairs
Department of Defense
Deputy Director for Economic-Resource Analysis
Office of. Global Issues
SUBJECT Oman: Oil System Vulnerability
1. Per our recent discussions, the attached represents 25X1
out preliminar assessment of the vulnerability of the Omani
oil system. ~ 25X1
2. If you have any questions or if we can be of further 25X1
assistance please feel free to cont
Attachment: 25X1
Oman: Oil System Vulnerability, GI M 83-lOCf?85, March 1983 25X1
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Central Intelligence Agency
MEMORANDUM FOR: James A. Placke
Deputy Assistant Secretary for Near East
and South Asian Affairs
Department of State
Deputy Director for Economic-Resource Analysis
Office of Global Issues
SUBJECT Oman: Oil System Vulnerability
1. Per our recent discussions, the attached represents
our preliminary assessment of the vulnerability of the Omani
oil system. 0
2. If you have any questions or if we can be of further
assistance please feel free to contact
Attachment:
Oman: Oil System Vulnerability, GI M 83-10185, March 1983
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SUBJEK~: Oman: Oil System Vulnerability
Distribution:
Orig -addressee(s)
1 - SA/DDCI
1 - ExDir
1 - DDI
1 - NIO/Eton
1 - DD/E
1 - Ch/SRD
1 - 25X1
1 - EVB
1 - Ch/PES
8 - OGI P
OGI/SRD/EVB (24 Mar 83) 25X1
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Central Intelligence Agency
Washington. D. C 20SOS
DIRECTORATE OF INTELLIGENCE
24 March 1983
Oman: Oil System Vulnerability
Summary
We believe the extended Zoss of oil export revenues caused
by destruction of Oman's key oil facilities woula' threaten the
stability of the regime unless foreign financial assistance was
made available. The United States' interests, in particuZa r,
would be affected far more than the negligible impact the Zoss of
Omani oit production would have on the world market. Oman
exports approximately 330,000 b/d which is worth, at current
prices, about $3.6 billion annually. Oman's location on the
Strait of Hormuz, gateway to the Persian Gulf, and its military
facility access arrangements with the United States make Oman an
important element of U. S. strategy in Southwest Asia. 25X1
We believe Iran currently poses the most ZikeZy military
threat to Omani oil facilities. The Khomeini government has
already demonstrated its willingness and ability to destroy
foreign oil production and export facilities. Oman also has
disputes with most of its Arab neighbors on a variety of issues,
several of which are linked to Oman's growing relationship with
the United States. In our judgment, these disputes between
Muscat and its Arab neighbors are Zess ZikeZy to pose threats to
Oman's oil facilities. ~- 25X1
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is aware of the vulnerability of its oil system to foreign
military attack and the possible consequences of such an
action. Muscat has apparently initiated a study of the system's
vulnerability and how it might be reduced. It is not clear,
however, to what extent Muscat will act on such recommendations,
most of which would be costly to implement. We believe the
cornerstone of a successful contingency, plan would be the
creation of an inventory of critical parts that could quickly
replace equipment damaged in an assault. During periods of
crisis, the oil system couZd'be manually operated to insure
maximum flexibility and reliability.
This memorandum was prepared by Ener 25X1
gy
Vulnerability Branch, Office of G~ Issues. The information
contained herein is u dated to 11 March 1983. Comments may be
directed to Chief, Energy Vulnerability Branch, on 25X1
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Oman: Oil System Vulnerability
Oman and Oil
More than 90 percent of Oman's export earnings and 60
percent of-its GNP are derived from crude oil sales. With oil
production currently targeted at 350,000 to 360,000 b/d, the $3.6
billion per year it produces is vital to the stability of the
Sultanate. While Oman's oil exports are not significant in the
world oil market, the stability of the generally cooperative
Qaboos regime is of substantial importance to the United States'
strategic interests in Southwest Asia. .Oman's location on the
Strait of Hormuz--through which one-fifth of the free world's
crude oil is currently shipped--and its proximity to Iran,. the
USSR, and the increasingly important Indian ocean area all make
Oman a valued ally of the United States in a highly volatile
region.
The Omani Oil System
The crude oil exports that maintain Muscat's national
revenues are produced at three locations from nineteen oilfields
operated by Petroleum Development (Oman) and one produced by the
French firm Elf Aquitaine.
o North Oman--The Fahud-Yibal area contains six oilfields
that generate nearly 60 percent of Oman's current
production.
o Central Oman--the Qarn Alam area also produces from six
oilfields and serves. as the point through which the
remaining 40 percent of the country's production flows.
Elf's only producing oilfield is also located in central
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Oman .
o South Oman--Marmul and Rima are the largest of the seven
fields producing in this area.
Potential Threats to the System
We believe Iran presents the greatest potential threat to
the Omani oil export system. The Iranians have adequately
demonstrated their ability to target key petroleum facilities by
their strikes on Iraq's offshore oil-loading terminals at-Mina Al
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Bakr and Khor Al Amaya in November 1980 and on Kuwait's gas-oil
separation plant at Umm al-'Aysh in October 1981. The gunboat
and commando attack on the Iraqi terminals eliminated about two-
thirds of Iraq's export capacity for the remainder of the war.
6Ve believe the nominal support Muscat has
provided Baghdad in its war with Iran, combined with the Sultan's
good relations with the United States and general endorsement of
Arab positions toward Iran could serve as an excuse for a
punitive attack given the general vindictiveness of the Khomeini
Government, especially if extensive damage were inflicted on
Iranian oil facilities.
We believe Oman also faces lesser threats from some of its
Arab neighbors. The long and violent history of feuding and
rivalry between Muscat and Aden and the existence of the largely
moribund Popular Front for the Liberation of Oman in South Yemen
raise the possibility of guerrilla sabotage, particularly to
Oman's southern producing areas. Despite a reconciliation
agreement concluded last year between Oman and South Yemen,
Aden's long term intentions toward Muscat remain in doubt.
Moreover, Oman's continued support of the Camp David agreements,
its full diplomatic relations with Egypt, and its facility access,
agreements with the United States have also drawn considerable
criticism from Arab states and organizations. While we do not
expect trouble in the near term on these points, we cannot rule
out the possibility of conflict in the years to come. 25X1
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