PDO to spend $800mn over 5 yrs on exploration

Petroleum Development Oman (PDO) aims to maintain average daily oil production at 550,000 barrels over the next ten years with the company also planning to invest US$800mn over the coming five years in exploration.

Speaking at PDO’s annual briefing, managing director Raoul Restucci also announced that the share of production from enhanced oil recovery (EOR) projects will grow from the current 10  to 25 per cent by 2020.

The official added that ten per cent of the company's infrastructure is manufactured locally, but this will rise to 50 per cent by 2020, when 90 per of its services will also be delivered by Omani entities.

“We delivered 452 new wells last year. There was a four per cent reduction in costs. We successfully executed US$1.2bn of activity, 25 per cent of which was allocated to local companies, and we will see that increasing substantially.”

However, the company managed daily production of 549,280 barrels in 2011 despite '410 days of work stoppages' due to strike action earlier in the year and heavy rains in November.

In 2011, combined production of oil, gas and condensates stood at 1.206mn barrels of oil equivalent (BOE) per day, with daily production standing at 549,280 barrels of oil, 93,600 barrels of oil condensate, 463,000 BOE of non-associated gas and 85,000 BOE of associated gas.

To help promote Oman's economic growth, PDO has 'ring-fenced dedicated work' for Omani companies, seconded PDO experts to local businesses, hired consultancies to develop 'robust economic models and set aside US$35mn to purchase equipment for local firms.

EOR projects scheduled to come on stream include the Qarn Alam steam project, which could produce approximately 40,000 barrels of oil a day by 2016. The Harweel miscible gas project will be on stream by April with a daily capacity of up to 40,000 barrels. The Amal steam project is expected to be operational by 2013.

Of the depletion compression projects, Kauther will be operational by September and Saih Nihayda by May 2013, with the Lekhwair gas project expected to be up and running by the first quarter of 2014.

In terms of exploration, the US$800mn set aside will be used to drill nearly 140 wells over the next five years, with 7,500sq km of 3D surveys carried out over the last 18 months.

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Extra gas 'still frozen' for large projects

Muscat - The allocation of extra gas supplies for large industrial projects in Oman is 'still frozen,' according to H E Nasser bin Khamis al Jashmi, undersecretary of the Ministry of Oil and Gas.

Speaking after the PDO annual briefing, H E Jashmi said the government has adopted a 'cautious' strategy and is looking at demands for smaller amounts.

“We are studying some small demands which may create employment and other socio-economic benefits. We are not closing the door but we are being very cautious. So far we have not been allocating big volumes of gas.”