Oman to diversify gas supplies on medium-term shortfalls

NICOSIA - Oman is to continue its policy of attracting new players to explore gas resources and develop production along with efforts to secure gas imports, a leading public official said, according to the Middle East Economic Survey on Monday. Oman’s Ministry of Oil and Gas Undersecretary Nasir Al Jashmi said that a projected medium-term gas shortfall had forced the government to reject new gas-intensive downstream projects, the Cyprus-based weekly publication quoted him as saying.

By (DPA)

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Published: Mon 19 Feb 2007, 5:14 PM

Last updated: Sat 4 Apr 2015, 9:55 PM

The pressure to increase domestic gas production and secure imports was building up, he added.

Meanwhile, despite expectations that the Petroleum Development Oman (PDO) corporation will arrest declining oil production this year, the government wants to continue aggressively marketing acreage to international oil companies (IOCs).

Dwindling domestic supplies have forced Muscat to take a more aggressive approach to exploration and development at home while gas imports are sought abroad, MEES said.

The policy of diversity in gas supply is to continue, according to Al Jashmi, adding, securing gas from multiple sources was central to Omani gas policy.

‘We have a lot of demand and there are projects in the pipeline that we cannot meet,’ he said and pointed out that gas demand in the sultanate was growing at an average 7 per cent annually.

Jashmi also indicated that Oman wanted to secure gas imports to preserve its domestic gas reserves for as long as possible, the MEES report added.

Apart from Qatar’s gas imports of 200 million cubic feet daily under the Dolphin project, which are due to start up in 2008, the government has conferred with Iran over potential pipeline imports.

Aside from availability of gas from Qatar and Iran, pricing is also expected to present new challenges for Oman, the MEES report said.

Qatari officials have indicated that new export projects will only be approved when gas is sold at around four dollars per million BTU units, well above the 1.30 dollars per million BTU levels of sales and purchases in the first phase of the Dolphin project.

In the oil sector, Jashmi said the government had addressed the problem of sharp declines in output by bringing in new players.

As a result, while PDO is still responsible for about 85 per cent of oil production, there are now 15 international oil companies working in exploration and production.

At the end of 2006, Oman had granted 33 concessions for oil exploration and production, the MEES report said.

‘We went out and tried to be aggressive in marketing these areas at the same time, oil prices have helped in attractive new investors. The aim is to find more hydrocarbons in the country,’ the Omani official said.

Total oil and condensate production in Oman was estimated at 713,000 barrels per day in January, the MEES report said.

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