Oman will spend $300 million on increasing capacity at its Sohar refinery in the northeast of the country, in line with expansion across its energy industry, a government official said on Thursday.

The refinery, the largest in Oman, has capacity of 116,000 barrels per day (bpd), which would be increased to 190,000 bpd. 'We see the upgrade completion taking place some time in 2013,' the financial ministry official, who asked not to be named, told Reuters.

Oman has been investing heavily in its oil sector to increase output and has managed to turn around declining production.

The refinery expansion will increase feedstock to Omani industries, as well as contributing to the availability of refined fuels for export to international markets.

Oman is a small oil producer, with output of around 850,000 bpd, but its crude is used to price around 12 million bpd of exports to Asia from some of the largest exporters in the world in the Gulf.-Reuters