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Oman's PDO expects crude output to fall in 2008

"Our 2008 production target range between 540 and 560 thousand barrels per day. And for a few years beyond 2008 our black-oil production will continue to stay at around 550 thousand barrels per day," Managing Director John Malcolm told reporters at the company's annual media briefing for 2007.

However, there will be significant increase in condensate production, thanks to the Kauther gas processing plant that was commissioned last November, he said. "In fact, our condensate production will almost double this year," he added.

The company expects output of condensates to reach about 80,000 b/d, against last year's 46,000 b/d - total daily production of oil and condensates thus rising to 630,000 barrels in 2008 from 607,000 barrels.

"Our gas production will also increase, thanks not only to the Kauther project but also to other gas-field development projects. In energy-equivalent terms our total hydrocarbon output will reach unprecedented heights over the next five years," Malcolm said.

In 2007, for the fifth year running, PDO, which accounts for nearly 80 per cent of the country's oil production and all of its natural gas supply, reached its oil output target range of 560 to 570 thousand barrels a day - average daily production for the year exceeded 561,000.

"We take those target ranges very seriously and let nothing - not even the unpleasant surprises that nature throws into our way - prevent us from reaching them. Even while cyclone Gonu was wreaking havoc along the coast of Oman last year, oil production from our fields did not stop," Malcolm said.

Gas production in 2007 was to the equivalent of 398,000 barrels of oil per day. "One key indicator used to measure performance is gas availability, and I am glad to report that in 2007 PDO managed an availability rate of close to 100 per cent. Here too, even Gonu did not prevent us from supplying gas," Malcolm stressed.

He said the year saw "substantial progress" on the company's drive to recover oil and gas from its existing fields. EPC contracts were awarded for the Qarn Alam steam-injection project, which will be the world's first full-field steam-injection project based on thermally assisted gas/oil gravity drainage (TAGOGD) in a fractured carbonate field.

Another groundbreaking EOR development was also launched with the award of the EPC contract for the Marmul polymer flooding project in southern Oman. "The project will lead to a 10 per cent increase in the oil recovery from Marmul's Al Khlata reservoir. The polymer preparation and injection facilities station will have a capacity of 17,500 cubic metres per day, making it one of the biggest polymer floods in the world," Malcolm said.

He added implementing EOR mega-projects had required the company to undergo a fundamental structural change that would continue over the next several years, also noting that waterfloods and other forms of secondary recovery currently accounted for half of PDO's oil production, adding:

"But within the next decade, enhanced oil recovery will account for a third of our oil production. The point that I would like to stress is that achieving such a large proportion of production from EOR projects tomorrow requires a huge amount of effort today."

He said the company expected some 35,000 people — the combined PDO staff and contractor workforce — to be involved in its operations over the next five years. "We will be managing 120 fields with more than 5000 oil wells by 2012, and 90 per cent of what they produce won't be oil but water — water that has to be separated from the oil and re-injected into the ground in an environmentally responsible way.