The Sultanate will continue to develop new oil and gas projects even if crude oil prices slide below the current level, according to HE Salim bin Nasser Al Aufi, Undersecretary at the Ministry of Oil and Gas. "The outlook for the year 2018 remains positive. Our system is resilient enough to produce oil even if prices drop below the current level. The government will continue to develop and bring new projects to reality," he said at the 2018 annual media briefing hosted by the
Ministry of Oil and Gas at the Institute of Oil & Gas (instOG) recently. "All our programmes continue to remain sound and solid and we will maintain the production levels even if prices drop further." Prices have ranged between $60 and 65 since the beginning of 2018. "I don't foresee oil prices will drop further drastically," he added.
Aufi said the Sultanate's total gas reserves stood at 24.96 trillion cubic feet (TCF) by the end of 2017, primarilyattributed to Khazzan and Ghazeer fields. Around 4.97 TCF of new reserves were added in 2017, up from 3.81 TCF in 2016. The Sultanate's oil and condensate reserves stood at 4740 billion barrels at the end of 2017 down by 376 million barrels in 2016 despite the addition of 355 million barrels of oil and condensate from exploration activities and revaluation of some producing fields. The decline is attributed to the transfer of around 323 million barrels of reserves into recoverable quantities based on recovery in prices.
Oil and condensate production averaged 972,000 barrels per day in 2017, down from 1004K in 2016 demonstrating the Sultanate's compliance with OPEC
agreement to cut production. The price of the Oman Crude Oil Futures Contract averaged $51.29 in 2017, which was up by $11.15 per barrel over 2016.
While the highest price of $55.59 per barrel was recorded in December 2017, the lowest was $44.54 per barrel registered in January 2016. The daily gas production in addition to quantities imported from Dolphin averaged 112 million cubic metres per day, of which 88 million cubic meters was nonassociated gas and 19 million cubic metres of associated gas and 5 million cubic metres of gas imported via the Dolphin, Aufi said.
The Sultanate's oil and gas expenditure amounted to $11.4 billion in 2017, as against $11.3 billion in 2016. The total oil sector expenditure was $7.9 billion in 2017, which was similar to $7.9 billion in 2016. The gas sector expenditure was $3.5 billion, against $3.4 billion in 2016. Four oil blocks have been opened for tendering in the last quarter of 2017 and the ministry is currently in the process of evaluating the tenders submitted by local and international companies. The oil and gas sector has been mandated to create 5000 jobs for Omanis in response to the Royal Directives of His Majesty to the public and private sectors to provide 25,000 jobs for Omani job-seekers.
However, we are confident of going beyond that, he added. Meanwhile, Petroleum Development Oman (PDO) has confirmed a "significant" gas find with estimated recoverable reserves of more than four trillion cubic feet (TcF) and 112 million barrels of condensate in the northern part of its concession area. The company also
reported on a string of achievements, including its best-ever safety performance, record investment in local companies and the creation of 14,146 job opportunities for Omanis in 2017.
In total, five wells have recently been drilled in the field and all have encountered gas. One is already producing and another will be hooked up shortly. Work is also progressing on two further appraisal wells, with plans for the expansion of production infrastructure. Additionally, exploration is continuing in nearby prospects.
PDO managing director Raoul Restucci said, "This is an exciting find which will provide a boost for economic growth in Oman and help meet rising gas demand from residential, commercial and industrial customers. Once again, our Exploration Directorate has performed admirably in challenging conditions to identify, discover and appraise a major hydrocarbon find which will make a substantial contribution to Oman's sustainable development. This year, we are celebrating the 40th anniversary of PDO gas production and this is a fitting way to mark that milestone."
Exploratory drilling has taken place at depths of 5,000 metres. The Barik and Miqrat reservoirs tested at commercial flow rates of up to 1.2 million cubic metres per day after fracturing. The discovery follows PDO's acquisition of high resolution 3D Wide Azimuth seismic data in the area in 2015. Further prospects are also being drilled.
Mabrouk North East builds on the discovery made in March 2013, when PDO announced another significant find at Mabrouk Deep, some 40km west of Saih Rawl.
Restucci added: "We have a very attractive portfolio which keeps us very active, with large seismic programmes and extensive exploration drilling."
The company operates gas fields and processing plants exclusively on behalf of the Omani government. The average Government daily gas supply during 2017 was 76.64 million m 3 /d, lower than the initially targeted level of 83 million m 3 /d due to the start of BP's
Khazzan field. Throughout, PDO effectively met the gas demand for all its customers despite increased requirement quantities for Oman LNG.
Notwithstanding a number of operational challenges in 2017, PDO
also showed good compliance with government targets arising from the OPEC/non-OPEC agreement to limit oil production, while compensating at short notice for any shortfalls in total country supply. Average oil production was 582,196 barrels per day (bpd). As an example of the step change in efficiency, the company's Well
Engineering Directorate carried out more than 21,000 well interventions, compared to 13,000 well entries in 2013 with the same rig and work-over hoist fleet. It also drilled 626 oil and gas production and exploration wells reducing the average well cost by 4 per cent and the rig move cost by 12 per cent compared to 2016 through better collaboration and rig sequence optimisation. Restucci said, "Contingent on OPEC constraints, we are maintaining momentum to be ready to deliver in
excess of 650,000 bpd. The Company is more efficient than ever and we have raised performance across the key parts of our value chain." On the safety front, the Company recorded a record performance with Lost Time Injury Frequency falling 0.20 per million manhours, albeit tragically with one work-related fatality. It also
recorded a new road safety milestone of 500 million kilometres driven by staff and contractors without a fatality, and with a 40 per cent fall in Serious Motor
Vehicle Incidents. Restucci commented: "Our Journey Management Control Centre, which monitors a fleet of more than 8,500 vehicles, has brought about a step change in safer driving since it was opened in 2016 with a 97 per cent fall in the average number of violations per vehicle.
Copyright 2018 United Press & Publishing LLC Provided by SyndiGate Media Inc. ( Syndigate.info ).
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|Publication:||Oman Economic Review (OER)|
|Date:||Apr 19, 2018|
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