Investments in Oman's mainstay oil and gas industry are projected to exceed $100 billion over the next ten years, underscoring the sector's preeminent role in fuelling the country's long-term socio-economic development. According to a top official of the Ministry of Oil and Gas, the outlay — the biggest ever in the Sultanate's modern history — is central to the government's goal of sustaining oil and gas output over long-term.
"Investments in the oil sector over the 2013-2022 timeframe will be in excess of $60 — 70 billion," said Shaikh Ali bin Thabit al Battashi, Adviser to the Ministry of Oil and Gas. "In the gas sector alone, Oman will invest more than $40 billion in exploration and production activities. Thus, over the next 10 years, we will see a gross investment in oil and gas of over $100 billion — 110 billion," he added.
Speaking exclusively to the Observer, Shaikh Ali said the allocations underscore long-term confidence in Oman's pivotal oil and gas industry. "Guided by the wisdom of His Majesty the Sultan, the Ministry of Oil and Gas hasformulated a robust strategy that secures the long-term future of the oil and gas sector. This strategy was the result of an extensive team effort, steered and guided by His Excellency Dr Mohammed bin Hamad al Rumhy, Minister of Oil and Gas, with constant oversight provided by His Excellency Darwish bin Ismaeel al Balushi, Minister Responsible for Financial Affairs, and in daily consultation with His Excellency Nasser bin Khamis al Jashmi, Under-Secretary of the Ministry of Oil and Gas. They have worked in synergy and in tandem with the Ministry's team, with all of the other stakeholders fully supportive of this strategy."
This confidence in the future of the country's hydrocarbon industry, the official further added, is reinforced by the fact that the Ministry's long-term strategy for the development of the sector extends all the way to the year 2044 and even beyond.
"In fact, we have been exploring with our stakeholders the possibility of extending the strategy beyond 2044, but that will take us another 2-3 years to accomplish. In the meanwhile, we have a maturation process right up to the year 2044." That process is aimed at harnessing Oman's estimated oil potential of over 60 billion barrels of oil in place. "Up to December 2011, we have only utilised 8.7 billion barrels, so there is still a lot of oil in the ground. With the price of oil over $100 per barrel and above, and with new technology constantly becoming available, we will be able to develop more of our fields," Shaikh Ali stated.
Turning to the gas sector, he said the Ministry is pursuing a two-tiered strategy for gas exploration. One involves a role for players like BP which is currently appraising the prodigious 'tight' gas potential of the Khazzan-Makarem field in Block 61, estimated to have around 150 trillion cubic feet (TCF) of gas in place.
At the same time, majority government-owned Petroleum Development Oman (PDO) is also investing heavily in exploration efforts centring on 'difficult' gas fields within its Block 6 concession. Preliminary findings have been very encouraging, he said.
"The indications we have is that Oman also has a bright future in exploring and producing tight, unconventional gas. But this will take time, and we don't expect this gas will be available before 2020-2021-2022. This will be difficult gas; it will be expensive to produce, but it will meet the requirements of PDO's enhanced oil recovery (EOR) projects. To secure the future of oil production in Oman, we will need a lot of gas to produce this oil. That gas will partly come from the 'difficult' reserves being explored by PDO."
Around $300 million has so far been invested as part of PDO's five-year gas exploration program. This initiative is going ahead simultaneously with BP's Khazzan-Makarem development, designed to offset the wedge expected from current gas supplies from PDO, he noted. As a result of these investments, production is expected to be sustained over the long term at approximately 900,000 barrels per day of oil and 3 billion cubic feet per calendar day of gas, the official added.
Oman Daily Observer