Oman’s top oil producer set to boost output 10% in 5 years
Petroleum Development Oman, the largest oil and condensate producer in the sultanate, is on track to increase its output capacity by more than 10% to top 670,000 b/d in five years as it ramps up exploration activity and pumps more out of existing fields, a company official told S&P Global Platts.
PDO, in which the Omani government has a 60% stake and Royal Dutch Shell a 34% share, is beefing up exploration, particularly in central Oman, and boosting oil production through enhanced oil recovery (EOR) techniques, said Sami Baqi, the company’s technical director.
“If you look at the projected forecast, given the richness of our portfolio we have today, we are confident that we can grow to above 670,000 b/d over the next five years,” Baqi said by phone last week. PDO’s output averaged 610,710 b/d in 2018, the highest level since 2005.
Oman, the biggest Middle East oil producer outside OPEC, has benefited from expanded exploration efforts, with the discovery of the Mabrouk gas field northeast of the sultanate last year. The field, which holds more than 4 trillion cf of gas and 112 million barrels of condensate, is being developed by state-run Oman Oil Co., Shell and France’s Total. The country’s total oil and condensate production averaged 971,070 b/d in June.
“Oman’s gas portfolio is very rich and we have the ability to grow further but this is simply driven by the supply and demand situation,” Baqi said. “So the potential is there to do more.”
Shell and Total are developing their own downstream gas projects in Oman — a gas-to-liquids plant by Shell and an LNG bunkering facility by Total — taking total investment expected in the field and associated projects to more than $20 billion. The sultanate is also developing its giant Khazzan gas field with the help of BP, which is expected to boost production from the current 1 billion cf/day to 1.5 billion cf/day by 2021.
Oman last week signed an exploration and production sharing agreement with Eni and BP Oman for Block 77, which covers an area of 2,734 sq km in central Oman. During the exploration phase, Eni and BP will each hold a 50% interest in the agreement, with Eni acting as operator.
PDO is ramping up exploration for gas, but its production of the commodity depends on the country’s needs, which varies from year to year. In 2018, PDO produced 2.3 billion cf/day of gas and 63,500 b/d of condensate. PDO’s estimated reserves by the end of 2018 was 3.285 billion barrels of crude and 13.3 trillion cf of gas.
The company began in July producing oil, gas and condensate from the $4 billion Rabab Harweel integrated project, the biggest project PDO has undertaken over its history that dates back to 1937. The sour oil and gas project will add 500 million barrels of oil equivalent (boe) to reserves and production could last over 20 years, he said.
“The Yibal Khuff project is another multi-billion project which is under construction at the moment,” Baqi said. “It is another Harweel type of complex project, developing sour oil and gas. It will add above 300 million boe. It is expected to come on stream by 2021.”
Besides the two sour oil and gas projects, the company expects to more than double the amount of oil produced from EOR to 23% of total output by 2025 from 11% today.
EOR projects include the injection of polymer, a heavy liquid that displaces heavier crude, and steam injection.
“Exploration efforts are progressing intensely across our concession,” Baqi said. “One of the areas that we are currently exploring and appraising is in central Oman and have been successful in Ghareef reservoir, and we will continue to appraise it.”