Oman to Use New Technology to Reverse Decline in Production

Oman is well on target to reverse oil production decline with new discoveries and state-of-the-art drilling technologies in an effort to gradually increase output from 2005.

Oil Ministry officials said that new technologies and discovered fields would increase Sultanate's oil production by 50,000 barrels per day from 2005. Petroleum Development Oman (PDO), which produces 90 per cent of Oman's oil, said its crude output fell to 703,000 barrels per day in 2003 from 771,000 barrels per day a year earlier due to ageing oilfields.

The total oil production from all producers, including condensate, produced an average of 819,500 barrels per day of crude oil in 2003 compared to 897,400 barrels per day in 2002. Although Oman's oil production in 2004 is expected to fall by at least 5 per cent compared to that of the previous year, the government has already started to correct the shortfall. PDO reported earlier that it has allocated $2 billion in the next five years on new technologies.

The effort has started to pay good dividends after the company reported this month that it has started new oil production from new oil wells at the Harweel field in the south of the country. Production is expected to be around an average of 18,000 barrels of oil per day by the end of this year.

The company said the wells were expected to substantially increase production in the second phase of development based on Enhanced Oil Recovery (EOR), which involves gas injection.

PDO has also intensified its efforts to other areas of its concessions in the north and central of Oman. Other techniques, including water injection and flooding are expected to recover a larger amount of oil. The company has pledged to produce 800,000 barrels per day by 2007.

Other producers, including US company Occidental, local company Petro-Gas and Total of France are also actively exploring to increase their productions. But Oman is not just relying on oil production.

The Sultanate has also made new gas discoveries this year. From the same Harweel clusters, PDO would produce 30 million cubic feet per day of gas this year from Harweel. PTTEP of Thailand reported last week that it expected to produce up to 60 million cubic feet of natural gas a day in its concession at block 44 in the Sham field.

Occidental Oman, another foreign company to sign a production sharing agreement with the government, is expected to produce 120,000 million cubic feet per day this month.

The new productions would help the government's efforts to meet gas demands to fuel local projects. Novus, operating from three blocks, has already said the company has successfully explored for gas and it would soon start production. With new developments in the energy sector, Oman is set to arrest oil production and increase its gas output. Even with a drop in oil production last year, Oman's economy grew by 6 per cent in 2003, thanks to higher oil prices.