business & finance club - Oman : Oman is focusing on intensifying oil exploration and excavation efforts to raise oil production levels in the coming years. According to Omani local media, Dr Mohammed bin Hamad al Rumhy, Minister of Oil and Gas, delivered a statement on oil sector in terms of crude oil reserves and condensates at the beginning of 2010, the average oil production of crude oil and condensates from 2000 to 2009, the average cost of production per barrel for Petroleum Development Oman (PDO) and the remaining oil companies operating in the Sultanate in the same period, the programmes and efforts exerted to raise the oil production levels and the planned projects in the oil sector in the 8th Five-Year Plan ( 2011-2015).

Dr Al Rumhy pointed out that the Sultanate"s average oil production in 2009 stood at about 812,500 bpd and reached about 859,600 bpd this year. The figures indicate that the production rates in the 8th Five Year Plan will rise from the current level. He pointed out that the cost of production per barrel is constantly rising as it has hit $17.1 per barrel for PDO. The cost varied for other oil companies, such as, Occidental Oman and Occidental Mkhaizinah.

As for the programmes and efforts undertaken to raise oil production levels, he affirmed that the efforts focused on intensifying the exploration and excavation efforts, taking the data on production from producing oil wells, evaluating them and subjecting them to new technologies such as injection with steam, polymer and water dumping and attracting international companies with experience in the use of advanced technologies in oil production.

He pointed out that the number of oil companies operating in the Sultanate rose from 12 in 2000 to 22 by the end of 2009. These companies work in evaluating the explored wells, applying advanced technologies to assess the reservoirs more accurately, developing ideal programmes for their production, updating and modernising existing installations which have been in service for long period, increasing their capacities and digging exploration wells in some oilfields to increase production.

Dr Al Rumhy added that the planned projects in oil sector in the 8th Five-Year Plan includes a number of new projects and implementing the existing projects as well as intensifying the exploration and excavation efforts and testing the reservoirs of the current wells. As for gas sector, Dr Al Rumhy pointed out in his statement that the proven reserves of the sector amounted to 13.14 trillion cubic feet and that the potential reserves in the same year amounts to 18.66 trillion cubic feet.

He added that the average actual production of gas amounted to 85 million cubic metres per day in 2009 and is expected to reach 122 million cubic metres per day in 2015. The actual cost of natural gas production in 2009 amounted to $0.73 for every 100 cubic feet compared to $0.27 for each 1,000 cubic feet in 2000. He also spoke about the average consumption of electricity, water desalination, LNG and oil well uses.

Dr Al Rumhy emphasised that gas usage priority in the Sultanate is to meet the domestic consumption, power generation, oil and gas production needs and developing the Sultanate’s various industries. Attempts have been made to enhance the oil natural reserves and production, including assessing the producing fields data, subjecting them to new technologies and inviting international exploration companies, he added. The number of these companies increased from two in 2000 to seven in 2009.

The ministry has also reached agreements with highly reputable companies to develop low production oil fields. It has also conducted tests on critical gas reserve and drilled deep exploitation wells, he added. The major planned natural gas projects in the 8th Five-Year Plan are enhancing current producing fields in Saih Roul and Kawthar, developing discovered fields and converting them to producing fields such as Khazan Makarim and Abu Toboul fields, he added.

The minister referred to the contribution of oil and gas companies in economic and social development activities within the scope of their specialisation, citing PDO, Occidental and Oman LNG as examples. An open debate touched on the current oil and gas reserves, the ministry’s efforts to increase them, the reasons for declines, future production forecasts and production costs in the 8th Five-Year Plan.