Muscat: Oman government has asked the majority state-owned Petroleum Development Oman (PDO) to raise its crude production to 600,000 barrels per day (bpd), from its long-term plateau of 500,000-550,000bpd annual production set by the company more than three years ago.
The growth in crude production will be achieved by applying state-of-the-art drilling technology and focusing on boosting output from several small areas and with sour gas injection, Salim Nasser Said Al Aufi, undersecretary at the Ministry of Oil and Gas, told journalists on the sidelines of launching the Oil and Gas Year Oman 2014 energy report. "We, from the government, put a challenge to PDO trying to understand what would it take for the company to increase its production up to 600,000bpd. We need to understand the time-frame, cost, it is not going to be cheap and dominated by a lot of drilling activities," Al Aufi said, adding that PDO's production has been growing slightly and this year, the company is producing 570,000 bpd so far.
However, he noted that the company is not discovering major fields. "It is still more of traditional exploration activities, probably in areas where PDO did not pay too much attention."
Al Aufi said the country's oil production target is set at 950,000 bpd and so far the average production is 945,000 bpd. "Now we have a mix of several companies that compensate each other."
The undersecretary pointed out that with the new drilling technology, PDO will be able to drill wells faster. "We can steer drilling in thin oil wells. In the past, we were able to stay steady in a thin oil well. New fracking techniques have also been developed outside Oman. We need to adopt that expertise locally as well as services associated with it."
Referring to the growing cost of average oil production, Al Aufi said the cost of production using enhanced oil recovery technique is high. Enhanced oil recovery fields constitute 14-15 per cent of total oil production in the country and this will go up to 30 per in the next ten years, which will jack up the cost for bringing crude oil above the ground. "Our challenge is to keep the cost of oil production at the present level and offset inflation and cost escalation."
He also said that the government is watching the recent fluctuation in the international market for crude oil prices and will prepare next year's budget accordingly.
To get in touch with the reporter: firstname.lastname@example.org