Oman's oil output at nine-year high

Oct 25, 2010 12:00 AM

Oman has boosted its oil production to a nine-year high of 875,000 bpd as the Gulf country is pushing ahead with an ambitious programme to develop its hydrocarbon sector, a senior Omani oil official has said.

The country, which is not an OPEC member, also pumped nearly 97 mm cmpd of natural gas in September, an increase of about 7 % over the same period of last year, said Nassir bin Khamis Al Gashmi, Undersecretary of the Omani Ministry of Oil. "Oman's oil production stood at around 875,000 bpd in September, the highest level since 2001," he was quoted as saying. He said oil production in Oman is managed by seven companies, including the government-controlled Petroleum Development Oman, which controls the bulk of the country's hydrocarbon sector.

The official said 22 local and foreign companies are also involved in exploration in the country. "As for gas, Oman's production reached around 97m cmpd in September, a growth of 7 % over September 2009," he said. Asked about oil prices, he said their current level is suitable as they cover production costs and allow Oman to pursue its costly enhanced recovery projects, which allow for the extraction of more crude. "The current price level also allows the companies to pursue the implementation of their development and exploration plans... if prices dip below this level, these companies might shelve some projects because of higher costs," he said.

The surge in Oman's oil output is in line with its budget targets and is a result of a massive investment programme launched by the government to reverse a steady fall in its oil production in previous year due to lower field recovery rates. In 2007, Oman approved an ambitious $ 10 bn programme to develop its oil and natural gas resources, which are officially estimated at around five bn barrels and 30 mm cm respectively.

The plan is designed to develop gas deposits and push up oil production to previous levels. Production began recovering in 2008, when it grew by nearly 6.5 % to 756,000 bpd from 710,000 bpd in 2007. Official data showed Oman pumped around RO 655.7 mm (Dh 6.2 bn) in its oil sector and RO 295.9 mm (Dh 2.8 bn) in the gas sector in 2009.

The surge in oil production allied with a sharp rise in crude prices to boost Oman's oil export earnings by nearly 954 % to RO 2.84 bn (Dh 27.3 bn) in the first seven months of 2010 from about RO 1.84 bn (Dh 17.6 bn) in the first seven months of 2009, according to the Ministry of Economy.

Gas revenues also swelled by nearly 21.7 % to RO 445.7 mm (Dh 4.2 7bn) from RO 366.1 mm (Dh 3.5 bn).

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