Petroleum Development Oman (PDO) confirmed today (20 March, 2016) that it set a new combined oil, gas and condensate production record of 1.29 million barrels of oil equivalent per day (boepd) in 2015.

The Company said it was confident of reaching a new sustainable long-term oil production plateau of 600,000 barrels per day (bpd), well ahead of its original 2019 target, to support revenue generation.

At the same time, it is pledging to intensify its cost-control programme to combat the effects of the low oil price environment with an efficiency drive across its operations and has reduced planned expenditure this year by $1.6 billion.

The average PDO daily oil production for 2015 was 588,937 bpd, the highest since 2005 and almost 14,000 bpd above the planned target. Gas production was 83 million m³/day, one million cubic metres above the planned target as the Company stepped up its effort to meet growing national gas demand.

Commenting on the 2015 performance, PDO Managing Director Raoul Restucci said, “With the sharp fall in global oil prices dominating our thoughts and deeds, I am pleased to be able to report that PDO still managed to surpass expectations right across the business.

“As the nation’s largest oil and gas producer, our staff are fully aware of the vital role they play in generating the resources and revenue needed to power Oman and their commitment to stay the course and deliver value, despite the worsening economic situation, was truly impressive.

“Ensuring our business is sustainable is a long-term goal of PDO but the current low oil price environment also underscores the critical importance of sustainability in the present. PDO has seized the opportunity to continue to drive business improvement and operate more efficiently, while maintaining our overarching commitment to safety.

“The current environment requires us to leave no stone unturned to boost near-term cash-flow and we have reduced 2016 expenditure by $1.6 billion. We’ll continue to work with our contractors to identify further cost reduction opportunities and optimise expenditure in light of the country’s economic challenges.

“Importantly, we have been able to maintain our growth plans and will continue to actively pursue and accelerate projects which can generate increased revenues, with early monetisation of discoveries and opportunities, top quartile recovery, meeting government gas requirements, delivering projects on promise, and ensuring stakeholder expectations are fulfilled.”

PDO added significant reserves and contingent resources, in excess of annual production, in 2015. There was a substantial oil discovery at Sadad North in southern Oman amounting to 44.5 million barrels of commercial contingent reserves (CCRs), contributing to a total of 109 million barrels of CCRs from new discoveries. Additionally, there was a 2 per cent rise in Stock Oil Initially In Place (STOIIP) to 67.8 billion barrels and a 4 per cent increase in Gas Initially In Place (GIIP) to 78.2 trillion cubic feet (tcf).

On the gas supply front, the Mabrouk Southwest discovery, yielded 0.38 tcf of commercial contingent reserves. The field was discovered as a satellite to the Mabrouk field in the Barik and Miqrat reservoirs in the northern part of PDO’s Block 6 concession area. By the year’s end, the Tayseer gas field discovery in southern Oman further added in place volumes of 0.93 (tcf) of gas and 117 million barrels of condensate.

PDO achieved the majority of its corporate project delivery milestones on or ahead of plan, and all were delivered within the year, with ground-clearing on the landmark Miraah solar energy project, the largest of its type in the world at peak capacity, already complete. The Company is now working to continuously improve its project delivery with a simplification of standards and further collaboration with contractors which will enhance delivery, the use of the Omani supply chain and improve cost effectiveness.

The Company is currently operating a variety of commercial-scale enhanced oil recovery (EOR) projects that include chemical EOR, miscible gas injection and thermal applications. It will also continue the maturation of more promising and novel EOR technologies through laboratory and field testing.

However, because of the resource-intensive nature and higher cost of tertiary recovery mechanisms, much emphasis has been placed on accelerating conventional oil and gas opportunities instead of additional short-term expansion of EOR projects. This optimisation is very much enabled by the several development choices we have in our portfolio and means that EOR is now expected to account for approximately 25 per cent of PDO oil production by 2025, as opposed to last year’s projections of 33 per cent by 2023.

Pages: 1 2