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Oman - Part 2 - The Oil & Gas Fields:.

Oman has more than 120 oil and gas fields, of which 95 are producing and the rest should be on stream in the coming few years. The producing oilfields' total capacity is more than 925,000 b/d. In the government's current five-year programme, for 1996-2000, Oman's oil production should average 880,000 b/d.

Oil production is averaging 895,000 b/d. The main operator, Petroleum Development Oman (PDO), is producing 840,000 b/d. The remaining 55,000 b/d are produced by Occidental, Japex and Elf. In addition, Novus in Bukha field produces 4,000 b/d of condensate, 1,200 b/d of LPG and about 40 MCM/day of gas (see table below).

Oman's oil production capacity has been rising steadily since the mid-1970s. In 1976 production averaged 370,000 b/d, a peak at the time. It declined and prompted PDO to install EOR facilities. It reached 700,000 b/d in 1992, from less than 630,000 b/d in 1989, when the main north-south export pipeline was expanded to about 650,000 b/d, with looping and replacement of corroded sections completed. A further expansion of the pipeline later enabled the operators to export at full capacity, as well as feed the local oil refinery (see Downstream Trends).

Proven oil reserves are estimated at 5.3 bn barrels, with PDO accounting for 98%. Reserve additions yearly exceed production. The ministry of petroleum and gas says at least 5 bn barrels should be added to the country's reserves during the next 10 years in order for oil production to keep meeting Oman's economic needs.
(000' b/d)
 Maximum Current
Operator Fields Capacity Output
Shell (PDO) Yibal 200.0 200.0
Shell (PDO) Rima/Jalmud 90.0 90.0
Shell (PDO) Lekhwair 90.0 80.0
Shell (PDO) Nimr 70.0 70.0
Shell (PDO) Fahud 50.0 45.0
Shell (PDO) Marmul 45.0 40.0
Shell (PDO) Al Huwaisah 35.0 35.0
Shell (PDO) Natih 30.0 30.0
Shell (PDO) Amal 20.0 20.0
Shell (PDO) Others 230.0 230.0
Total PDO 860.0 840.0
Occidental Safah 45.0 41.0
Occidental* Al Barakah 2.0 1.0
Japex Daleel 10.0 10.0
Elf Sahmah 3.0 3.0
Vovus Bukha** 5.5 5.2
Total Oman 925.5 900.2

Occidental's production includes less than 200 b/d from the small Wadi Latham field, near the declining Al Barakah field.

Bukha, a gas/condensate field, is producing 4,000 b/d of condensates, about 1,200 b/d of LPG and 40 MCM/day of natural gas.

Oil production costs in Oman are higher than in neighbouring countries. But PDO has managed to cut its unit operating cost to about $1.35-1.40/barrel and uses cutting-edge technology in most of its fields which are complex. Costs for the other operators range from less than $4 to more than $5/barrel.

Production costs are high because of Oman's complex geology, with many wells required for a small production volume, and the low quality of crude oils in the southern fields. The sultanate's oil output is a little over 10% of Saudi Arabia's 8.76m b/d output but Oman has a far greater number of wells relative to volumes produced. Oman has about 2,000 producing wells with an average yield of 400 b/d per well. Saudi Arabia has 1,800 producing wells with average yield of 3,700 b/d per well.

As a PDO executive explains, most of Oman's oil comes from geological formations about 500 million years old with only a few giants. In Saudi Arabia, most of the oil comes from super-giants and giants with formations 100 million years old (see geological profile of Oman on SP 19-20).

A major challenge is a rising water content in old reservoirs. According to 'Petroleum Argus' of Jan. 30, 1995, "PDO expects to produce three barrels of saline water with each barrel of oil at the end of the decade". Similar challenges are to be faced by the other operators in Oman, although these now only produce a total of 60,200 b/d of oil, condensate and LPG (see Gas Market Trends).
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Comment:Oman - Part 2 - The Oil & Gas Fields:.
Publication:APS Review Oil Market Trends
Geographic Code:7OMAN
Date:Feb 9, 1998
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