BRIGHT PROSPECTS

The Sultanate’s gas industry was born with PDO’s Yibal Gas Plant which was officially opened by His Majesty Sultan Qaboos bin Said on October 29, 1978. Since then, PDO has been finding gas fields, developing them into productive assets and transporting gas by pipeline for domestic use and export. The company’s gas portfolio has now evolved into a fully-fledged, complex operation, successfully overcoming multiple challenges. PDO has supplied the gas that has fuelled the country’s economic progress. It has been used to generate electricity, desalinate sea water for Omani homes and businesses, and provide fuel for cooking. It has also served as feedstock for a growing number of local industries, such as the smelting of aluminium and production of fertiliser. In addition to producing gas, PDO has also made great strides in conserving it, implementing groundbreaking schemes such as the Miraah solar installation and the Nimr Reed Beds project. The company has also committed to meet the World Bank’s “Zero Routine Flaring by 2030” target well before the deadline year, with innovative asset flaring reduction projects and new technology deployment, such as microturbines to convert flare gas into electricity.Gas has certainly fuelled and enabled domestic and industrial development and export revenues for liquefied natural gas (LNG) exports. Development of complex oil and gas development projects, such as Rabab Harweel and Yibal Khuff bodes well for the economy and has provided the confidence and capability to identify, drive and support expansion plans for the foreseeable future. Driving forth the positive outlook, Petroleum Development Oman (PDO) has confirmed a “significant” gas find with estimated recoverable reserves of more than four trillion cubic feet (TcF) and 112 million barrels of condensate in the northern part of its concession area. BP Oman, the operator of the largest unconventional gas project in the Middle East – a gas project called Khazzan produces a significant supply of Oman’s gas. After four years of field development, First Gas from Khazzan was delivered on time and under budget in September 2017. The Khazzan and Ghazeer developments are expected to deliver total production of 10.5 trillion cubic feet of gas and around 350 million barrels of condensate through the end of concession. The total lifetime capital expenditure for the Khazzan and Ghazeer gas fields is estimated at $16 billion, with some 300 wells being drilled through the estimated operation age for the two stages. The Sultanate’s total gas reserves stood at 24.96 trillion cubic feet (TCF) by the end of 2017, primarily attributed to Khazzan and Ghazeer fields. Around 4.97 TCF of new reserves were added in 2017, up from 3.81 TCF in 2016. Oil and condensate production averaged 972,000 barrels per day in 2017, down from 1004K in 2016 demonstrating the Sultanate’s compliance with OPEC agreement to cut production. The Oman Government’s firm resolve to continue developing new oil and gas projects irrespective of the crude oil prices shows the positive outlook for the economy ahead. In this special edition, Oil and Gas Review tracks PDO’s journey over the past 40-years in gas production and looks at how it is getting ready for the future. OGR would like to commend PDO’s External Affairs and Value Creation Directorate- Mohammed Al Ghareebi, Abdul-Amir Al Ajmi, Ian Ford, David Brown, Usama Al Harthi, Ikhlas Al Waili, Hamed Al Hamdan, Karima Farid, Saleh Al Alawi, Yaqoub Al Mufargi, Samah Al Rawahi and Heyam Al Farsi for their constant support. We also would like to thank other stakeholders such as BP Oman, Oman Gas Company, Oman LNG and Halliburton who have been associated with the gas sector in Oman.

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