National oil company Petroleum Development Oman (PDO) has made significant progress in developing the Bahja-Rima cluster field, which has more than seven billion barrels of oil in place.
This is expected to record a growth rate of 45 per cent in production to reach a level of 94,000 barrels of oil equivalent per day (boepd) by 2021 from conventional, low unit technical cost projects, said the Central Bank of Oman (CBO) in its annual report.
“Also, considerable developments have been made in the Bahja North and South fields, which contain oil-in-place in excess of 1.7 billion barrels,” the report noted. The small fields provide an elevated opportunity to drive growth in a mature, low cost per barrel cluster. This is a very significant step, especially in the current challenging, and capital-constrained environment, the CBO report said.
Further, Ghaba North in the Qarn Alam cluster project began gradually adding oil production and is set to reach its peak production during 2017. The field recovery will grow by 20 per cent, with a reserve volume of about 38 million barrels.
The CBO report also said that the Sultanate’s crude oil production rose by 2.6 per cent in 2016 over the previous year, with a daily average production of 1,004,300 barrels from 242 oilfields across Oman, up from 908,900 barrels per day in the previous year.
This was partly due to the rise in output from CC Energy, Occidental Oman (Mukhaizna), and PDO. Average production from Occidental Mukhaizna increased from 121,600 barrels per day in 2015 to 126,900 barrels per day in 2016. Similarly, average production from CC Energy rose to 40,400 barrels per day in 2016 from an average of 32,300 barrels per day in 2015. In addition, the average production of Daleel grew to 48,700 barrels per day in 2016, from 46,600 barrels per day in the previous year.
The CBO report further pointed out that PDO continued to remain the biggest petroleum company in Oman, with a daily average oil production of 600,200 barrels in 2016, compared with a lower production level of 588,900 barrels in 2015.
The quantity of oil produced by PDO in 2016 was well above the company’s long-term target of 550,000 barrels per day. PDO continued to maximise recovery from conventional oil and gas fields, as well as enhance exploration from unconventional opportunities.
In 2016, the oil exploration companies in Oman drilled 53 exploration wells and according to the initial findings, the results appeared to be promising (PDO alone drilled 29 exploration wells). The most significant oil discovery by the PDO in 2016 was the Shammar, in the shallow and high-permeability reservoir in the Lekhwair field, where about 40 million barrels of commercial contingent resources were booked. Another major discovery by the company was the Qarn Alam-Reba project, where a total volume of 27 million barrels of commercial contingent resources were booked.
The exploration activities by the company have added approximately 189.3 million barrels of stock tank oil initially. Occidental Oman drilled six exploration wells in 2016. Also, Oman Oil Company Exploration and Production (OOCEP) drilled four exploration wells, while the remaining companies drilled 14 wells. Total oil and condensate reserves for Oman were estimated to be 5,242.5 million barrels in 2016, reflecting a decline of 2.4 per cent from the estimated level in 2015.
Natural gas production
The country’s daily production of natural gas was up 5.3 per cent, touching an output of 106.1 million cubic meters (19.3 million cubic meters of associated gas and 86.8 million cubic meters of non-associated gas) per day in 2016, compared with 103.6 million cubic meters in 2015. Natural gas accounted for about 40 per cent (47 per cent, including condensate) of PDO’s oil and gas production in 2016.
Also, Oman imported 5.5 million cubic meters per day of natural gas from Dolphin Energy Company in 2016 to meet rising domestic demand, more specifically for a re-injection into oil wells.
Provisional figures for 2016 pointed to an aggregate reserve of 24.79 trillion cubic feet of natural gas, while the number of gas producing fields in Oman stood at 35 last year. A number of companies conducted gas exploration activities in 2016 with notable results—a total of 24 exploration wells were drilled. With notable success in Tayseer-Ara discovery, PDO’s explorations in 2016 led to booking 0.45 trillion cubic feet of gas as commercial contingent resources.
During 2016, PDO was able to deliver some major projects in the gas sector, a notable one was Yibal third-stage depletion compression. The initial goal of the project was to help meet the increase in the domestic gas demand as the mature field is set for continuing decline.
Hence, the project will help sustain the Yibal Government Gas Plant peak production capacity at an average of 18 million cubic meters per day at a lower pressure, achieving the ultimate recovery. Moreover, the Yibal Khuff project, which moved into a construction phase in 2016, is one of the largest and technically most complex ventures to be implemented by PDO.