Oman PDO Oil Output Seen Averaging 750,000 B/D In 2004

Oman Oil Minister Mohammed bin Hamad al-Rumhy said in remarks published by several Omani newspapers Saturday that his country oil production will start rising again this year after declines in the last two years.

Oil production by the state-controlled Petroleum Development Oman, which produces 90% of the country's oil, will average higher at 750,000 barrels a day in 2004, he said. Oman has been subject to a decline in oil production since mid-2001, a result of the natural decline in the life cycle of its oil fields.

In the first nine months of 2003, oil exports fell 9.4% to 208.87 million barrels, from 230.59 million barrels in the year-earlier period.

Data from the National Economy Ministry shows total crude oil production averaged 823,800 barrels a day in the first nine months of 2003, down 9% from 904,700 barrels a day in the first nine months of 2002.

PDO's share of production averaged 741,420 b/d in the nine-month period, compared with 780,000 b/d in November 2002 and 840,000 b/d in May 2001. The company is now targeting output of 800,000 b/d by 2007 under current development program.

PDO is 60% owned by the Omani government, with the Royal Dutch/Shell Group owning 34%, TotalFinaElf SA 4% and Portuguese oil and gas company Partex 2%. Other foreign oil companies are responsible for the remaining 10% of Omani oil production. Al-Rumhy attributed the expected improvement in production to efforts made by the Oil Ministry in explorations.

Meanwhile, al-Rumhy said he agreed with the budgetary planners on the assumption of an average oil price of $21 a barrel for the 2004 government budget, which was announced Thursday.

Details of the budgetary items, including the oil price assumption and oil earnings are expected to be released during a press conference by Oman's Finance Minister Sunday.