OMAN - Oil Producing Operators.
PDO accounts for more than 70% of the country's crude oil and condensate production and the bulk of its natural gas supply. Gas fields and processing plants are operated by PDO exclusively on behalf of the government.
PDO in January 2012 became a member of the International Technology Facilitator (ITF), a non-profit agency aimed at increasing co-operation in the upstream petroleum industry. PDO thus joined regional national oil companies (NOCs) such as Saudi Aramco and the Kuwait Oil Co. (KOC) as members of the ITF which facilitates JVs of oil companies to share R&D costs and man-power. PDO said it was interested in using ITF to further research into EOR techniques.
ITF only opened regional office in April 2011, hoping to create a major hub in the Middle East. Its regional director Ryan McPherson said: This region "is the world's largest oil supplier and has technology needs that may differ from other areas". Members of the ITF share the funding for new technology projects through joint industry projects. All developers retain full intellectual property rights.
Four big Omani EOR systems are to be operational from 2012, with at least another two expected to begin soon there-after. Oxy, which operates the Mukhaizna oilfield in south-central Oman, implemented a major steam-flood project which boosted gross crude oil production ten-fold between 2005-10 and to reach 150,000 b/d before end-2012.
PDO is implementing a number of EOR projects in the Marmul oilfield in southern Oman, in the Harweel field and in Qarn Alam, which marks the world's first commercial application of steam-assisted gas-oil gravity drainage in a fractured carbonate reservoir.
In 2012, Oman's EOR systems are expected produce up to 300,000 b/d of crude oil. This will add considerably to the sultanate's commercial production of associated gas, which is badly needed in this country whose energy consumption is rising rapidly.
When Oman faced massive production declines in the last decade it turned to EOR technology to reverse the fall. Now these techniques are salvaging about $30m a day in oil revenue at current prices.
EOR is a series of techniques used to increase the amount of recoverable oil to be extracted from any particular reservoir. During its life-cycle, an oilfield goes through a number of distinct phases where various techniques are employed to maintain crude oil production at plateau levels primary, secondary and tertiary recovery. Arab oil producers are entering the tertiary phase, commonly known as EOR which uses techniques such as injecting steam, gas or chemicals into a reservoir to make the oil thinner and easier to extract from tight rock formations.
PDO in early August 2011 gave the region's first contract for solar-powered EOR to GlassPoint Solar. The US-based company will supply a 7MW solar array to create steam which will be used for steam-flooding EOR at Oman's depleting oil reservoirs. Syham Bentouati, corporate technology adviser at PDO, then said: "After extensively researching solar EOR solutions, we've identified GlassPoint as the most promising technology for this pilot". Construction on the project was to begin in February 2012 and will be completed before end-year.
To sustain and increase production, PDO has made extensive use of EOR over the past decade. The technique creates the pressure needed to push oil to the surface. Oman's oilfields are among the oldest in the Middle East. Should the pilot plant be a success, GlassPoint expects further business in Oman.
Steam-flooding is a widely used EOR technique, in which steam recreates the pressure of produced oil and gas and pushes the crude to the production wells. GlassPoint's system will produce 11 tons of high-temperature, high-pressure steam an hour from a solar array spanning more than four acres. This is sufficient to push about 33,000 barrels of crude oil to the surface. The steam from the array will be channelled into the existing steam distribution network, rather than supplying a specific field.
Solar EOR reduces the need for natural gas, the feedstock for steam production and often the substance pumped into fields to create pressure. Oman uses 200 trillion BTUs of natural gas a year for EOR, enough to power every household in Oman five times over.
Like all GCC countries other than Qatar, Oman is facing a shortage of natural gas which has seen it delay its industrial development. The sultanate is also pursuing a project with Shell to produce tight gas, a costly and technically complex under-taking. While the capital costs for the solar array out-weigh the equipment costs for gas-based EOR, this is out-weighed by the lack of feedstock costs. A GlassPoint executive says: "If you look at the levellised cost of energy, [solar EOR] comes in at between $3-4. Gas is at $5 today, making solar very price competitive".
The main draw-back of solar EOR is the large surface area covered by the array. Large-scale projects would require vastly more space than the Omani pilot's 7MW array. While this problem is mitigated by the remote location of most of the world's oilfields, it is not a feasible option for offshore production and could obstruct onshore production. Large projects would necessitate thousands of acres.
Oman is not the first country to consider alternatives to gas-based EOR. Both Saudi Arabia and the UAE are experimenting with injecting CO[sup.2] into reservoirs. Abu Dhabi National Oil Co (ADNOC) has already completed a successful pilot project at its Rumaitha field, while Saudi Aramco is to launch a similar one at its Ghawar field by 2013.
In mid-2009 PDO announced on its website four projects worth a total of up to $7bn for its oilfields. It said of the four contracts on offer, two each were on fields in the country's north and south. One contract in each area was to cover engineering and maintenance at fields, each with annual turn-over of up to $200m. Two other contracts worth up to $150m a year were to cover work off-site from the oilfields, such as hooking up pipelines, again one in the north and one in the south. The deals had a duration of seven years, with an option to extend for three more.
Innovation has been key to PDO's success. But PDO has not been restricted to field development. Its automated procurement systems have meant a near trouble-free relationship.
The history of oil production in Oman is unique. It is not like the North Sea, where there were oil discoveries, massive production levels and then fast declines. There had been a steady increase in oil production until the turn of the millennium. It is a reflection of Oman's complex geology, where exploration is far less efficient than normal. But technology is evolving and enabling a steady increase in recovery, up to 20% in some fields. The easy oil has all been found and developed. Now what is left is the difficult oil province.
Shell Development Oman remains optimistic about the future of Oman's oil sector. The relationship with the government is one of mutual partnership and the maximum exchange of knowledge. In 2006, Shell launched Shell Technology Oman, an EOR R&D centre in Muscat. The centre works closely with Sultan Qaboos University's Oil & Gas Research Department and PDO.
The geology of Oman's petroleum fields reflects its harsh topography, with most of them deep and tight, making extraction extremely difficult. The new projects rely on expensive EOR systems to extract what remains in the oilfields. PDO has more than 20 EOR projects.
PDO in early February 2009 announced discovery of three new oilfields. Two of the new fields - Taliah and Malaan West - are among PDO's Lekhwair cluster of fields in the north-west. They are part of the Upper Shu'aiba formation (Fm), which contains many of the reservoirs of PDO's main fields. The third - Rabab South-East - confirmed the preliminary results of well tests PDO mentioned in 2008. Oil production from Rabab South-East began later in 2009, through the existing facilities at Harweel field in the south.
Drilling and studies in 2008 enabled PDO to better estimate the extent of petroleum volumes at the Burhaan West and Fahud SW gas fields, as well as at the Budour NE oilfield found in previous years. The reservoirs of Burhaan West and Fahud SW have low permeability. As a consequence, the reservoir rocks first had to be cracked with extreme hydraulic pressure.
PDO's first EOR projects were in fields near Nimr, around Harweel, in Qarn Alam, at Marmul, and at Fahud. Near Nimr, PDO has pilot steam injection systems in Amal West, Amal East and Thayfut fields. It injects miscible sour gas into a cluster of fields near Harweel. At Qarn Alam, PDO has a thermally assisted gas-oil gravity drainage (TAGOGD) system in a heavy-oil fractured carbonate reservoir. It is injecting polymer in a heavy oil reservoir at Marmul. At Fahud, the EOR system, also TAGOGD, injects steam to accelerate recovery of light oil from a fractured carbonate. PDO in 2010 completed full field steam-injection facilities.
The Amal fields produce heavy oil from beam pumped wells with depths varying from 500 to 1,000 metres. PDO built an 800 CM/d water treatment plant for Amal West and Amal East. Two skid-mounted 200 t/d portable gas-fired steam generators provide the steam.
In the south, PDO had the facilities for the Harweel Phase-2AB miscible sour-gas injection system completed in 2010. PDO found Harweel in 1997 and since has found seven similar fields containing intra-salt carbonate stringers in a large 1,000 sq km area. It estimated the cluster contained an initial 1.8bn barrels in place of light and sour oils and re-trograde condensate. The cluster includes Shujirat, Sakhiya, Harweel Deep, Sarmad, Ghafeer, Dafiq, Dhahaban South, and Zalzala. PDO has drilled more than 60 wells in these fields and in Phase-1 has produced oil from four fields and injected gas in Zalzala to confirm the viability of miscible sour gas injection. During Phase-1, PDO produced about 18,000 b/d from the Harweel cluster.
Production could rise to more than 100,000 b/d once the Phase 2AB project is completed. The crude oils found in that cluster are some of the oldest on earth. PDO estimates a 10% ultimate recovery without miscible sour-gas injection which may increase to more than 30% with injection. The Harweel facilities will process very corrosive fluids, so that much of the installed equipment and piping is made from corrosion-resistant alloys.
PDO found Qarn Alam in 1972 and estimated that initial oil in place in the field's fractured carbonate reservoir was 1bn barrels. Without the thermal project, only 4% of the oil could be recovered from the field. But with its TAGOGD project, ultimate recoveries may exceed 32%. PDO says Harweel and Qarn Alam later in 2010 could each add 40,000 b/d.
In April 2007, PDO began work on a shake-up of its engineering operations by employing an in-house front-end engineering and design (FEED) office for the first time. Under the terms of the initial five-year cost-plus contract, the successful design firm was to assign up to 30 staff to PDO, working with existing staff and employees assigned from Shell (see the background in omt6OmanFieldsFeb4-08).
PDO has more than 120 oil and gas are on stream connected to its production system in onshore Oman's four main oil fair-ways, which are as follows: (1) the north, along the border with the UAE and Saudi Arabia, which is an extension of the Arabian Basin, including Thamama-related fields like the Fahud-Lekhwair-Daleel group; (2) the north-central groups in the Infracambrian Salt Basin, which include the main producing fields like Yibal and fields centred on Natih-Shibkah; (3) the central and west-central groups, also in the Salt Basin, which include the gas-rich Saih Nihaydah; and (4) the south, in a Lower Salt Basin with fields of both very heavy and medium/light oils centred on the Marmul-Nimr-Rima-Jalmud trend.
All of PDO's wells now are horizontal. These and the use of 3D seismic have resulted in oil and gas finds in excess of expectations. These wells stretch 500m to 1.5 km along a reservoir, giving higher production with less water, and help in the search for or identification of additional reserves.