Oman to increase oil production

The Sultanate [of Oman] is aiming at enhancing crude oil production to 940,000 barrels per day (bpd) and natural gas output to 98 million cubic meters a day this year, a top-level official at the Ministry of Oil and Gas told media here yesterday. "We are expecting almost 940,000 barrels per day this year. All oil companies are increasing production. We have a new producer, CC Energy, which is producing around 15,000 barrels of crude oil per day, which will go up to 22,000 bpd by the end of the year. Daleel's production is reaching about 40,000 bpd and Occidental and PDO are witnessing growth in crude production," Nasser bin Khamis Al Jashmi, undersecretary at the Ministry of Oil and Gas, told journalists on the sidelines of a press conference jointly organised by the Ministry of Oil and Gas, Petroleum Development Oman, Orpic, Occidental Oman and Oman LNG, here yesterday. The average daily production of oil and condensates rose 4 per cent last year to reach 918,500 bpd, while gas production increased by 3.3 per cent to 98.2 million cubic meters in 2012. New oil concession Addressing the media, Dr Mohammad bin Hamad bin Saif Al Rumhy, Minister of Oil and Gas, said the government has received bids from international oil companies for developing four open blocks — 51, 54, 55 and 58."Blocks 54 and 55 are in the final stages of awarding. Block 51 is also moving positively forward." The minister also noted that another six blocks —41, 43, 56, 57 and 59 — will be tendered in April.Al Jashmi said Oman has signed two oil concession agreements — one with MOL and the other with Frontier Resources International — for developing oil fields on production sharing agreements last year. The number of companies operating in the oil and gas sector has reached 18, working in 29 concession areas, by the end of last year.Al Jashmi said as many as 41 new exploratory oil wells were drilled last year and additional 389 million barrels in oil reserves and condensates were booked. "The Sultanate's reserves of oil and condensates amounted to around 4,630 million barrels, in addition to 18 trillion cubic feet of gas," added Al Jashmi. In 2012, the Sultanate exported 279.4 million barrels of crude oil and condensates, 8.4 million tonnes of LNG through Oman LNG and 3.1 million tonnes through Qalhat LNG. The output of the refineries at Mina Al Fahal and Sohar amounted to 76.1 million barrels. Gas price revision Referring to the increase in natural gas price supplied to major industries, Dr Al Rumhy said the gas price of five major industries were increased in January 2012 to $1.5 per mmBtu, which will further increase by 50 cents every year until it reaches $3 per mmBtu in 2015. "Thereafter, it will increase by 3 per cent or the rate of inflation, whichever is high," noted the minister.   However, the minister said that there is no plan to extend the gas price increase to small time consumers like cement producers. The government gives first priority to power and water sector as well as the requirements of oil and gas industry and industrial sector for allocating natural gas.   Petrol demand The petrol and other fuel consumption in Oman doubled between 2006 and 2012. Even if Mina Al Fahal and Sohar refineries operate in 100 per cent capacity, these refineries will not be able to meet the local demand for the coming three years, until Sohar refinery's improvement project goes on stream. "When Sohar refinery improvement project comes on stream, we will be able to meet the demand until 2020, if the growth in consumption continues at this rate," said Mus'ab bin Abdullah Al Mahrouqi, chief executive officer of Orpic. The total investment in the Sultanate's oil and gas sector totalled $10.6 billion with 71 per cent as capital expenditure in oil wells and facilities and 29 per cent as operating cost. The Omanisation in the companies operating in the upstream and downstream oil firms amounted to 80 per cent by the end of 2012. The average increase in Oman crude oil price in 2012 amounted to 30 per cent compared to 2011. This has positively contributed to the government revenues and the gross domestic product. Oil and gas contribution in the GDP in 2012 stood at 55 per cent, an increase of 4. 1 per cent compared to 2011. Al Jashmi said the Ministry of Oil and Gas has completed a number of key projects in 2012, including a steam injection project at Qaran Al Alam, which started production in March 2012, and Harweel project that stared operation in April 2012, with an average daily production of 16,215 barrels per day in December, 2012. Al Jashmi also revealed that Oman Gas Company has also started the initial design for a project for producing liquefied petroleum gas and a study for supply of piped cooking gas to some cities and a natural gas pipeline to Duqm from central Oman. Albawaba Business