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Significant increase in natural gas output planned over five years by Oman.

According to ongoing commentary from its undersecretary for oil and gas, the energy directorate in the Sultanate of Oman, has

reiterated that the Arabian Peninsula state's national hydrocarbon production profile for the next five years reflects a substantial

increase in natural gas extraction during this period, but minimal growth in oil output.

The Omani objective is to raise gas production to an average of 120 million cubic metres per day (mcm/d) over the five-year cycle

running from 2014 through to the end of 2018, confirmed undersecretary Salim Al Aufi reporting to business news services and the

energy analyst community, an improvement of 17.65 per cent on 2013 performance.

By comparison 2013, gas production grew by an average of 102 mcm/d; a 3.7 per cent improvement on the previous year. Oman's

gas exports have been severely limited by rapidly expanding domestic demand over the past few years.

Government sources in the Omani capital are banking on achieving the scheduled start-up of BP's Khazzan tight gas project in

2017, which is expected to deliver a major boost to existing supply volumes. Khazzan alone is forecast to lift gas output by about

28 mcm/d by 2018.

Meanwhile, average crude oil and condensate production is projected to reach between 950,000 and 960,000 bpd

(barrels per day) over the same five-year period, Aufi revealed. However, this represents a relatively miserly increase of less than

2 per cent above last year's average volume.

Oil production in Oman, which is not a member of OPEC (Organization of the Petroleum Exporting Countries) unlike its fellow

Arabian Gulf producers, averaged 942,000 bpd in 2013, an increase of 2.5 per cent on 2012. However, OPEC is likely to reassess

its global oil demand estimates on a regular basis throughout the year, with statistics more likely to decline than grow this could

leave Oman with a tricky deficit between budget and income to bridge.

In domestic gas consumption terms, Oman facing a potential supply crisis for a number of years, and has had little choice but to

attempt to import gas from nearby Iran, which owns the world's largest gas reserves. Inevitably, restrictive economic sanctions

imposed by the west over Iran's nuclear programme, have largely hindered this purchasing policy, an initiative further undermined

by doubts as to the capacity of Iran's ageing production infrastructure to produce sufficient gas to meet its own needs

at home.

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Publication:Andy McTiernan Property & Economy Bulletin
Geographic Code:7OMAN
Date:Mar 4, 2014
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