PDO to boost oil output to 700,000 bpd in coming years

https://www.omanobserver.om/article/1139711/business/energy/pdo-to-boost-oil-output-to-700000-bpd-in-coming-years

OMAN DAILY OBSERVER / 7 JULY 2023

CONRAD PRABHU

MUSCAT: Petroleum Development Oman (PDO), the nation’s biggest hydrocarbon producer, plans to ramp up oil output to over 700,000 barrels per day (bpd) in the coming years, up from an average production of 660,894 bpd in 2022.

The revelation came in the 2022 Annual Report of the Ministry of Energy and Minerals, published here on Wednesday.

The majority state-owned energy company added an average of 8,894 bpd to its daily oil output in 2022 (versus 2021 figures). Condensate production, on the other hand, averaged 100,172 bpd while gas production of 56 million m3/day was in line with projections of lower customer demand, it said.

Taken together, total production averaged 1.17 million barrels of oil equivalent per day (boepd) in 2022, compared with the previous year’s average of 1.223 million boepd.

“As the country’s largest hydrocarbon producer, we continued our role as the country’s swing producer for gas, requiring us to operate in a highly dynamic mode,” PDO noted in the report. “The coming years will see continued production growth, in line with our production ambition of more than 700,000 bpd,” it stated.

2022 was also a “milestone year” that saw PDO rejig its corporate strategy and roll-out a new operating model. “After an extensive stakeholder engagement programme, we have developed a new purpose and strategy for PDO, which have been approved by our Board. These will enable us to sustain and grow our core business in the face of mounting climate change realities whilst ensuring energy security, affordability and sustainability,” the company said.

“The changes will ensure we continue to deliver and grow oil and gas in ever more sustainable ways and also play our part in building a new energy system for Oman. This includes investment to become a net-zero business by 2050 in line with the country’s NZE2050 orderly transition. To achieve our aims, we are also instituting a new operating model, bringing improvements in our processes, structure and people performance, thereby optimising the resources at our disposal and empowering our people,” it further stated.

Capital expenditure for the year amounted to $5 billion, while operating expenditure remained stable at $1.9 billion. However, in line with an ongoing cost-optimisation drive, significant savings were achieved, according to PDO. Cumulative savings against the budget totaled over $670 million, representing an increase of over 21 per cent over the previous year. Oil capex savings amounted to $632 million, mainly attributable to drilling efficiencies, well optimization and project savings. A further $38 million was accrued in gas capex savings.

“We are placing more focus on operational cost competitiveness, aiming to sustain our current top-quartile unit operating cost of US$6 per barrel of oil equivalent (boe) through to 2030,” the company noted.

Adding to its sizable hydrocarbon reserves, PDO also booked a total of 126 million barrels of oil and 0.34 trillion cubic feet (Tcf) of non-associated gas were booked as contingent resource (CR) volumes in 2022. The overall unit cost of finding oil and gas was near US$1.34 per barrel of oil equivalent. Further, by deploying new seismic techniques, PDO was able to identify new hydrocarbon accumulations, with the potential to unlock up to 10 billion cubic metres of additional contingent gas reserves in the Mabrouk field in central Oman, it added.