Oman to spend $10 billion to raise oil output to 900,000 b/d

Oman to spend $10 billion to raise oil output to 900,000 b/d

Muscat (Platts)--9Apr2006

Oman plans to raise its crude oil production to 900,000 b/d by 2010 or
2011 from 780,000 b/d currently and plans to spend $10 billion over the next
five years to achieve that target, Omani oil minister Mohammed Rumhi said
Sunday.
"We are planning to spend more than $10 billion in the current five-year
plan to sustain and boost our production of oil and gas," Rumhi said on the
sidelines of energy conference in Muscat.
The $10 billion is part of a five-year development plan that started in
2006 with funding coming directly from the government, Rumhi said.
Asked about oil production figures, he said: "It will be 900,000 b/d by
2010/2011." In 2004, the country's total production stood at 754,000 b/d.
The Sultanate also aimed to double natural gas output during the same
time frame, Rumhi said. "I think under the current program we're planning to
go to something like 70-80 million cubic meters/day. Currently we are
producing about half of that," Rumhi said.
Oman, which is not an OPEC producer, has seen its production decline in
recent years after peaking at just under 1 million b/d in 2000. The country's
recoverable oil reserves stand at 5.5 billion barrels, mainly in the northern
and central regions.
The largest and traditionally most reliable fields are in the north.
These fields, which include Yibal, Fahud, al-Huwaisah, and several others, are
now mature and face future declines in production.

FOCUS ON GAS TO BUILD RESERVES
Oman is also aiming to boost the country's reserve portfolio through more
intensive natural gas exploration and by using enhanced recovery techniques,
Rumhi said.
"Given the pivotal role that gas is poised to play in Oman's future
industrial and economic development, the ministry is doubling its outlay
towards gas exploration in an effort to add to the country's reserve
portfolio," the minister said.
The Harweel recovery project and the Mukhaizna steam injection project
are "landmark examples" of the enhanced recovery efforts under way in Oman,
Rumhi said. "These are ongoing projects and we are going full steam on them,"
he added.
Petroleum Development Oman, a joint venture between the government and
Royal Dutch Shell, awarded a contract to the UK's Petrofac in November 2005
for development of natural gas injection infrastructure at the Harweel field.
Work is also being carried out on the Ghafeer and Sarmad cluster of oil
fields. PDO estimates there may be reserves of 250 million barrels in these
fields, with a potential maximum production level of 100,000 b/d.
The government awarded the Mukhaizna field to Occidental Petroleum, after
it was relinquished by PDO. Occidental plans to bring production at Mukhaizna
to 150,000 b/d by 2011 from a current level of 10,000 b/d using large-scale
steam injection.
"Enchanced oil recovery has the potential to unlock hundreds of millions,
if not billions, of barrels of reserves in Oman," Rumhi said.

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