PDO to invest $2b in oil projects

Petroleum Development Oman (PDO) will invest $2 billion in Enhanced Oil Recovery (EOR) projects during the next five years and hopes to achieve production of nearly a quarter of a million barrels per day through it by the end of the decade, said John Malcolm, managing director.

Malcolm said two large oil fields, Harweel and Mukhaizna, which are being developed under EOR projects, will return Oman's oil production to its 1990s level of 800,000 barrels per day.

"We plan to produce something like 10,000 barrels a day from Harweel in southern Oman early next year. The potential acceleration of the Mukhaizna development is presently being reviewed.

"If we do it right, if we manage all the difficulties facing the project and operations teams, Harweel will deliver 100,000 barrels a day within five years. In Mukhaizna, too, our aim is to accelerate the development very quickly indeed and to make volumes in the order of 50,000 barrels a day on a similar timescale."

According to Malcolm, both projects are essential to the long-term future of PDO.

Oman has nearly achieved its oil production target of 703,000 bpd set for this year.

However, oil production, which has been falling fast mainly due to the increasing number of matured fields, is a major challenge for PDO. To boost production, PDO has identified five different areas to focus on during the next five years — the development of existing and conventional wells, increasing production through water flooding technology, production through EOR, and drilling of new wells.

Water flooding, EOR and drilling of new wells will play a major role in oil production, he said.

He noted there are three ongoing projects for water flooding — in Lekhwair, the Dhulaima and Fahud area, and Marmul. The fourth one coming up fast in the Al Burj cluster is located in the south.

EOR projects, Malcolm said, will bring PDO back to its 800,000 barrels a day through miscible gas injection in Harweel, and steam injection in the Mukhaizna and Qarn Alam fields. With EOR in the forefront of production technology, PDO hopes to become a leading oil company in the region.

He said exploration is a risky business and its outcome difficult to predict, but PDO has several exploration wells which are being drilled.

It is looking particularly for carbonate stringer clusters, similar to Harweel.

If it can find one of these and develop it quickly, the way it is developing Harweel, this will give a major boost to PDO's oil production.

With the agenda set for the next five years, PDO hopes to achieve oil production of over 800,000 bpd by 2008.