Origins and history Petroleum Development Oman

1 origins , history

1.1 consolidation (1970–1979)
1.2 growth (1979–1994)
1.3 maturity (1994–2002)
1.4 sustainability (2002–present)

origins , history

a geological survey of country in 1925 d arcy exploration company found no conclusive evidence of oil. twelve years later, however, when geologists began intensively searching oil in neighboring saudi arabia, oman s sultan said bin taimur granted 75-year concession iraq petroleum company (ipc). pausing second world war, exploration oil underway in oman.

the exploration , production operations run on behalf of ipc petroleum development (oman , dhofar) ltd. operating company had 4 shareholders, each interest of 23.75%: royal dutch/shell group, anglo-persian company (which become british petroleum company, or bp), compagnie française des pétroles (a predecessor of today’s total) , near east development company (whose shareholders standard oil of new jersey , socony-vacuum, today’s exxonmobil). remaining 5% stake held fifth shareholder, partex, representing interests of oil magnate, calouste gulbenkian.

having landed @ duqm in february 1954, ipc geologists faced tribal conflicts made access promising oil prospect, jebel fahud, difficult. reached jebel in october 1954 , began survey surrounding terrain. supplies had transported duqm. in january 1956 company started drilling first @ fahud hardships in vain: dry. later, when supply line switched sumail gap, warring tribes able disrupt convoys , bring operations halt.

further dry wells drilled , lack of success, combined worsening logistical problems , glut of oil on world market, led of partners withdraw venture in 1960. shell , partex opted remain in oman continue search oil. optimism pay off, however: struck commercial oil @ yibal in april 1962 — , these inauspicious beginnings oil-producing nation born.

in 1963 natih field discovered, followed closely success @ fahud, few hundred metres original ipc well. investment in pipeline coast , other hardware necessary transport , export oman s crude made. 276-kilometre pipeline requiring 60,000 tons of steel pipe laid, labour being provided inhabitants of whichever villages happened near worksite.

the pipe laying followed closely construction of industrial complex @ saih al maleh (later renamed mina al fahal), building of tank farm, installation of single-buoy moorings seagoing tankers , erection of 20-megawatt power plant. whole development — including pipeline, coastal industrial area, tank farm, marine terminal, chain of radio repeater stations , housing staff @ ras al hamra — cost $70 million.

the first export of omani oil took place on 27 july 1967. original debit note shows consignment consisted of 543,800 barrels (86,460 m) of oil valued @ $1.42 barrel. month before, in june, compagnie française des pétroles rejoined partnership taking on two-thirds of partex s equity share, resulting in following shareholding in company had changed name petroleum development (oman): shell 85%, compagnie francaise des petroles 10% , partex 5%.

on 23 july 1970 majesty sultan qaboos took on father ruler of country. made first visit pd(o) offices on 18 august 1970.

consolidation (1970–1979)

all through 1970s, pd(o) strove maintain production , replace reserves while developing professionalism. significant discoveries in decade contributed objective: ghaba north in 1972, followed saih nihayda, saih rawl, qarn alam , habur. 5 fields on stream 1975, crude oil being transported via new 20-inch (510 mm) pipeline main pipeline 75 kilometers east of fahud. in part these new sources of oil, production averaged respectable 341,000 barrels per day (54,200 m/d) in

the first half of 1970s important other reasons well. on 1 january 1974 government of oman acquired 25% shareholding in petroleum development (oman); 6 months later shareholding increased 60%, backdated beginning of year. result, foreign interest in pd(o) made of shell (34%), compagnie française des petroles (4%) , partex (2%). these shareholdings have remained unchanged present day. (the company, however, underwent change 6 years later. on 15 may 1980, registered royal decree limited liability company under name petroleum development oman — without parentheses in name.

growth (1979–1994)

in 1980s production rose new record levels, dispelling, seemed, doubts future of oman s oil , gas industry. end of 1984 average daily production had risen 400,000 barrels per day (64,000 m/d) , reserves stood @ 3.8 billion barrels (600,000,000 m).

meanwhile, company had become involved in setting government gas system, provide natural gas interior industry on coast. , remarkably successful in undertaking.

then, in 1986, oil price collapsed. instantly pdo required cut costs while increasing production , maintaining reserves. did remarkable success. company turned focus on innovation , experimentation. technological leaps in processing huge volumes of data acquired in three-dimensional seismic surveys helped pdo explore great success during period. horizontal wells, made debut in 1986, yielded between 2 , 4 times production 1 given well. (they have since become norm in pdo.) time , again company broke own records drilling wells in shortest time , drilling longest horizontal wells.

maturity (1994–2002)

by end of 2000 pdo witnessed increase in production. due increase in production arose application of latest technology increase oil recovery in existing fields. , of production increase on years made of new oil fields not found developed @ ever-accelerating pace. during period 1967-1980 of pdo’s production came 11 fields; 1988, 50 fields provided sum total of pdo’s oil output; 1990 60, , in 1999 100.

when pdo s gas-exploration campaign in 1990s made clear how bountiful country s gas fields were, government decided establish new industry: export of liquefied natural gas (lng). in 1996 pdo concluded agreement government develop central oman gas fields in order supply gas lng plant in qalhat, near sur. fulfill end of agreement, company had drill wells, hook them new gas processing plant @ saih rawl, , transport processed gas via 352-kilometre pipeline qalhat. furthermore, pdo responsible guaranteeing delivery of gas 25 years.

this upstream lng project, costing $1.2 billion, single biggest project in pdo s history. , executed planned. saih rawl central processing plant , gas pipeline saih rawl qalhat dedicated nation in november 1999, first downstream cargo of lng shipped korea in april 2000, , majesty sultan officially opened lng plant 6 months later.

having built such momentum in oil production entered 1990s, company expected trend continue. unfortunately, company’s field-development strategy start of 21st century – based on incremental infill drilling horizontal wells , extensive waterflooding – had momentum dissipated before waterflooding projects, require comprehensive reservoir studies, implemented. natural production-rate decline of major oil fields caught company @ start of millennium. , make matters worse, business had fundamentally changed: new fields coming in smaller sizes; new wells delivering less oil; costs going up. fact company’s operating model – way carrying out business – not sustainable in longer term.

sustainability (2002–present)

following comprehensive review in 2002 led sweeping change programme, pdo laid out ambitious production-recovery plans based not on waterflooding on enhanced oil recovery (eor) techniques: application of heat, chemicals or gas solvents alter way oil or injected water flows in reservoir. but, in order them sustainable in long run, plans had executed substantially less money envisaged, making them more challenging. total of $2 billion in cost savings on five-year period 2002–2008 incorporated company’s budget. fortunately, because of long-term nature of investments required, omani government agreed @ end of 2004 extend pdo’s exploration , production concession , operating agreements 40 years – until 2044.

meanwhile, gas continues growth area company. new gas-processing plant commissioned in saih nihayda in 2005, , 1 due in 2008 pdo s newest gas field in kauther. addition of 2 processing plants, one-third of hydrocarbon energy pdo supplies come natural gas—the fuel has central role in government’s economic diversification plans.

pdo faces formidable set of challenges. execution of eor projects, expansion of gas production , implementation new ways of working mean that, technically socially , environmentally, pdo remain in forefront of region’s oil , gas business.