Current government policy on oil and gas
Questions were raised about Oman's oil production in April 2004 following publication of an article in the New York Times which claimed that Shell had mistakenly increased proven oil reserves in 2000, 'resulting in a 40 pct overstatement' and had been overly optimistic about Oman's oil reserves for years. Also reported in Financial Times of 8th April 2004.
Shell, which owns 34 pct of Petroleum Development Oman, counter claimed that it had presented revised figures for proved reserves in Oman to investors in February 2004, and is continuing to invest substantially in advanced improved and enhanced techniques of oil recovery. In fact, EOR techniques developed in Oman could actually become an export technology.
Perhaps it's a result of a shake-up with Shell that Oman has chosen to diversify exploration and production. Although PDO is still responsible for 85 pct of production, 15 other international oil companies are now working in the country. The government is very keen to continue aggressive marketing with overseas oil companies in a bid to find more hydrocarbon fields.
I was interested therefore to read remarks made by Nasser bin Khamis Al Jashmi, undersecretary at the Ministry of Oil and Gas and chairman of Oman Refinery Company at the fourth Middle East Artificial Lift Forum (MEALF) which was held at the Shangri-La's Barr Al Jissah Resort & Spa earlier this month. The interview was originally published in Middle East Economic Survey and was republished in the Khaleej Times.
Mr al Jashmi was keen to emphasize to the attendees that Oman wished to promote further development of lifting technology in the oil industry to raise output and lower costs. Currently, 90pct of Oman's oil is lifted artificially.
Gas is not oil, but it is geologically associated. A gas-field production engineer told me informally back in January 2004 that Oman was selling forward gas supplies which hadn't been proved. I mentioned this to one or two people in business in Muscat, who were sceptical.
Oman is anxious to diversify sources of gas imports to provide energy supplies for large projects. Oman is to import 200 million cubic feet daily of gas from Qatar under the Dolphin project from 2008 and has conferred with Iran over potential pipeline imports. There's a bit of a hiccup about prospects of supply from Qatar.
So it is very notable that His Majesty Sultan Qaboos bin Said al Said spoke at a meeting of walis and shaikhs while on his annual Meet-the-People tour about the availability of gas as an energy source for water desalination. The Times of Oman reported His Majesty as saying:' “Thank God, the Sultanate has sufficient gas, but not in sufficient quantities to meet such requirements.”'
He went on to explain to citizens that government policy was to develop parallel tracks with regards to gas sources. For the time being, Oman wants to hang on to its own gas reserves which can be used for export and to create revenue, and to use imported gas for powering its local industries. He looked forward to the time when the cost of using solar power would be low enough to use effectively for large-scale desalination.
I think he'll have to wait a while yet.
Shell, which owns 34 pct of Petroleum Development Oman, counter claimed that it had presented revised figures for proved reserves in Oman to investors in February 2004, and is continuing to invest substantially in advanced improved and enhanced techniques of oil recovery. In fact, EOR techniques developed in Oman could actually become an export technology.
Perhaps it's a result of a shake-up with Shell that Oman has chosen to diversify exploration and production. Although PDO is still responsible for 85 pct of production, 15 other international oil companies are now working in the country. The government is very keen to continue aggressive marketing with overseas oil companies in a bid to find more hydrocarbon fields.
I was interested therefore to read remarks made by Nasser bin Khamis Al Jashmi, undersecretary at the Ministry of Oil and Gas and chairman of Oman Refinery Company at the fourth Middle East Artificial Lift Forum (MEALF) which was held at the Shangri-La's Barr Al Jissah Resort & Spa earlier this month. The interview was originally published in Middle East Economic Survey and was republished in the Khaleej Times.
Mr al Jashmi was keen to emphasize to the attendees that Oman wished to promote further development of lifting technology in the oil industry to raise output and lower costs. Currently, 90pct of Oman's oil is lifted artificially.
Gas is not oil, but it is geologically associated. A gas-field production engineer told me informally back in January 2004 that Oman was selling forward gas supplies which hadn't been proved. I mentioned this to one or two people in business in Muscat, who were sceptical.
Oman is anxious to diversify sources of gas imports to provide energy supplies for large projects. Oman is to import 200 million cubic feet daily of gas from Qatar under the Dolphin project from 2008 and has conferred with Iran over potential pipeline imports. There's a bit of a hiccup about prospects of supply from Qatar.
Qatari officials have indicated that new export projects will only be approved when gas is sold at around four dollars per million BTU units, well above the 1.30 dollars per million BTU levels of sales and purchases in the first phase of the Dolphin project. Khaleej Times.Mr al Jashmi said that average gas demand in Oman was growing at 7 per cent annually. The government has been obliged to reject new downstream industries, he added, because there wasn't enough gas to supply energy needs in the mid-term.
So it is very notable that His Majesty Sultan Qaboos bin Said al Said spoke at a meeting of walis and shaikhs while on his annual Meet-the-People tour about the availability of gas as an energy source for water desalination. The Times of Oman reported His Majesty as saying:' “Thank God, the Sultanate has sufficient gas, but not in sufficient quantities to meet such requirements.”'
He went on to explain to citizens that government policy was to develop parallel tracks with regards to gas sources. For the time being, Oman wants to hang on to its own gas reserves which can be used for export and to create revenue, and to use imported gas for powering its local industries. He looked forward to the time when the cost of using solar power would be low enough to use effectively for large-scale desalination.
I think he'll have to wait a while yet.
