Oman investing $4b to raise output

Abu Dhabi: Oman is investing about $4 billion in the short term to lift crude oil production to higher levels, the Sultanate's oil and gas minister said yesterday.

Mohammad Bin Hamed Al Rumhi also said Oman will not cut output following Opec's decision.

"Our current production is just shy of 800,000 bpd including condendates but we are increasing that in say, five years to at least 900,000 bpd or a little more," he said.

"Oman is investing in a few projects like Enhanced Oil Recovery (EOR), steam injection and others. The investment will be around $4 billion."

He said Oman is a small producer and output falls sometimes due to technical glitches. "We will not cut output and we are not an Opec member."

The minister also said that crude prices remain acceptable as long as they are between $50 and $60 a barrel. "That is a reasonable price," he said.

"The oil recovery factor from GCC and North Africa is not more than 20 per cent and less than 10 per cent for gas. We must unlock the recovery factor and it needs to be fast," he said.

Al Rumhi warned that regional oil producers could seen be facing a challenge in producing "difficult oil" and cited sky-rocketing production costs faced by Oman.

"The disease is contagious and spreads and could cross borders to Saudi Arabia, Iran, Kuwait and other producing nations."

He reiterated that increased recovery from existing fields is better than exploration due to lower risks and guaranteed benefits.