Business | Oil & Gas

Omani company's output to decline for eighth year

The fall in Oman's oil production last year and the next four years has been attributed to ageing oilfields and complex operations to produce oil.

  • By Sunil K. Vaidya, Bureau Chief
  • Published: 23:55 February 11, 2008
  • Gulf News

Muscat: The fall in Oman's oil production last year and the next four years has been attributed by the Managing Director of state-controlled Petroleum Development Oman (PDO), John Malcolm, to ageing oilfields and complex operations to produce oil.

Briefing media yesterday at the Oil & Gas Exhibition Centre in the Mina Al Fahal district of Muscat, Malcolm said: "Many of our fields have been producing oil for more than 30 years. Because they are mature, they require new approaches to ensure that they continue producing."

He said that the enhanced oil recovery (EOR) technologies had offered PDO, an affiliate of Royal Dutch Shell, a lifeline. However, he added, "They come at a considerable cost and require intensive technical management."

Talking about complexity, he said: "Indeed, our operations have become more complex than ever as we embrace a raft of new technologies to secure the long-term future of the Sultanate's oil production."

Target range

He also revealed that for the fifth year running, PDO had achieved its oil production target.

"In 2007, average production for the year stood at more than 561,000 barrels per day, within the target range of 560,000 to 570,000 barrels per day," he said.

However, it was lower compared to average oil production for the year at 589,000 barrels a day in 2006. In fact, PDO output has been falling since 2000 when it peaked at 840,000 bpd.

The PDO target of oil production for 2008 is even lower. "We are targeting production between 540,000 bpd and 560,000 bpd for 2008," said Malcolm. Interestingly, PDO pumps over 80 per cent of Oman's oil.

Concession area

Talking about the new discoveries, Malcolm said that even after 40 years of exploration and production, PDO's concession area - also known as Block 6 - continues to hold tremendous potential. "With new thinking and new technology, we have been able to unlock significant new potential. In 2007 we drilled eight exploration wells, and they have confirmed that Block 6 is still very much 'alive'."

Last year, PDO announced the discovery of the Budour Northeast field in the Birba area of south Oman. This oilfield, the PDO MD said, has significant potential.

He also announced significant new oil volumes from the site.

"A second exploration well - Budour NE-2 - discovered significant new oil volumes in the same geographical region," he said.

The well found a high-quality, oil-bearing carbonate reservoir in a formation beneath the one tapped by the original discovery well."

Furthermore, a new and potentially significant oil discovery has also recently been made in Rabab Southeast, also in south Oman, he added.

The discovery well is currently being tested, and the test results still remain to be evaluated.

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