The Oil sectors:
Petroleum Development
Oman (PDO) - which produces
around 89% of the Sultanate’s
crude and oil condensates - and
the other oil companies are
moving ahead with their plans
and efforts to increase oil production
capacity and offset the
relative decline in productivity
the country has been witnessing
since 2002. In 2005 average
daily production totalled 774,
800 barrels, including 66,300
barrels of oil condensates.
Production has increased modestly
since Occidental began
producing from the Mukhaiznah
field in September 2005.
Around 718,100 barrels of
oil per day were exported in
2005. Most of it (32.2%) went
to China, while the remainder
was exported to Thailand
(16.8%), Japan (16.4%), South
Korea (15%) and several other
countries. The Oman Oil
Refinery Company received
around 86,600 barrels per day
to be refined for local consumption,
while the surplus was
exported.
The Sultanate has crude oil
and oil condensate reserves
totalling over 4,803 million
barrels, with PDO’s reserves
accounting for over 92% of this
figure. In 2005 four prospecting
agreements were signed: with
India’s Reliance Industries in
Concession Area 18 in the Gulf
of Oman, with the Irish
Company Circle Oil in
Concession Area 49 in the
Governorate of Dhofar and the
offshore Concession Area 52 in
the sea between Sawqarah Bay
and the Omani-Yemeni marine
territorial border, and with the
Swedish company Gott Oil and
the Danish company Odin
Energy in Concession Area 15
in the Dhahirah Region. These
companies will carry out a series
of exploration programmes over
a three-year period.
During 2005 14 companies
carried out prospecting operations
in 22 concession areas.
Some 18 exploratory wells
were drilled and a number of
geological and geophysical surveys
carried out. As a result of
these operations PDO was able
to add 23.08 million barrels of
crude to the general reserves,
while Occidental succeeded in
adding around 6.15 million barrels
to the reserves.
An agreement has been
signed with Occidental
Petroleum and Liwa Energy to
invest over US$2 billion in
developing the Mukhaiznah
field. Work has also continued
on the US$1,300 million Sohar
Refinery, which went into production
in August 2006 with a
productive capacity of 116,400
barrels per day. PDO and
Occidental both have ongoing
prospecting programmes. The
West Asia Oil and Gas
Exhibition and Conference,
which took place in Muscat in
April 2006, was attended by
150 companies from all over
the world. On 16th April 2006
PDO launched the “Oil and Gas
Dictionary” - the first specialist
dictionary of its kind - which
includes around 1,500 terms
and expressions used in the oil
and gas industries. The launch
coincided with the “Muscat -Arab Culture Capital
2006”
activities.
The Gas sectors:
The natural gas sector grew
by around 21.6% a year during
the Sixth Five-year Plan (2001-
2005), considerably higher than
the projected growth of 16.6%.
Natural gas revenues in the
2006 budget
amounted
to RO394 million - some 44.5% higher than the 2005
budget gas revenues, which totalled RO 273
million. In 2005 gas contributed 9% to the budget
revenues, while in 2006 they account for 11%.
The Sultanate’s liquefied natural gas (LNG)
production has increased significantly -
especially since the third LNG train in Qalhat
went into actual production with an annual
productive capacity of 3.5 million tonnes,
boosting the country’s natural gas production to
10.1 million tonnes a year. The natural gas
sector’s contribution to GDP is expected to
increase to around 9.2% by 2010. Its added value
is also set to rise, particularly with the
addition of the gas tankers “Ibri” and “Ibra” to
the Oman Shipping Company’s fleet in June 2006;
these new vessels will transport shipments of
Omani gas to customers in Asia, Europe and the
United States.
In 2005 the Sultanate produced around 917,746
million cubic feet of natural gas, comprising
270,562 million cubic feet of associated gas and
647,184 million cubic feet of non-associated gas.
Average daily production was about 2,514.4 million
cubic feet - a rise of 7.61% compared with the
2004 figure. LNG exports in 2005 totalled around
6.98 million metric tonnes. A further 182,000
metric tonnes of gas liquids was exported to the
United Arab Emirates (UAE), while 40,910 million
cubic feet of natural gas was exported to the UAE
through the government gas line system, which is
managed by the Oman Gas Company.
Last year some 917,404 million cubic feet of
natural gas was either used locally in power
stations, industrial estates, industrial projects
and the oil fields, or exported.
In 2005 the third natural gas train, operated by Qalhat LNG, went into
production with an annual output capacity of 3.5
million tonnes. This project, which cost around
US$645 million to implement, exported its first
shipment to Spain in December 2005. The US$150
million gas treatment station at Seih Nihayda
field opened on 19/12/2005, raising daily output
capacity to over 80 million cubic feet; this will
help meet the growing demand for natural gas in
the major industrial projects that are being set
up, particularly the projects on the Sohar
Industrial Estate. There are also plans to expand
prospecting and production operations.
Output is set to receive an additional boost when
a Thai company – PTTEP - becomes involved in gas
production in Oman in 2006. The Sultanate
currently has proven gas reserves in excess of 24
trillion cubic feet, in addition to a further 33.8
trillion cubic feet of expected reserves.
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