Oman presents the upstream energy industry with a very challenging but exciting hydrocarbon environment. With its difficult terrain and geology, and abundance of heavy oil trapped in smaller, isolated reservoirs, the country continues to draw companies looking to develop enhanced oil recovery (EOR) technologies.
In fact, the country has achieved remarkable success with its EOR programme to become one of, if not the only hydrocarbon landscapes where all three major enhanced production techniques are in execution.
The emergence of Oman as an oil producing country was brought about under the stewardship of His Eminence Mohammed bin Hamad Al Rumhy, Oman’s Minister of Oil and Gas. Over the last fifteen years, Al Rumhy has reversed field decline, bringing about a 17% production increase in Oman’s production by 2007, ten years after he assumed his current position.
“Oman has a difficult geology and a difficult terrain. It is intellectually very stimulating and exciting. Financially, it is expensive and technically very difficult too,” said HE Al Rumhy talking to Oil & Gas Middle East in 2012.
The country has also a remarkable gas industry that has led it to becoming one of the top ten biggest exporters of LNG in the world.
“The gas industry is very complicated, and as times have changed so too has the outlook for gas. When we discovered gas over and above material volumes in the early 1990s, the main question on everybody’s lips was: How can we monetize that resource for the good of the country?” he says.
The answer to that question was the formation of a new company, Oman LNG. “At that stage, the thinking was to go for LNG and I think that was the right decision at that juncture. We have been very successful, and it was partly down to luck that we discovered gas when we did in the early 90s,” says the Minister.
“We began exporting into the LNG world at the end of the century, and ever since the LNG market has been very healthy and probably exceeded our expectations at that time,” he adds.
HE Al Rumhy also observes that the swift decision-making process enabled construction to begin in the late 90’s, which was good timing project-wise, predating the regional mega-project scramble of the 2000’s. “We managed to construct the two LNG trains of OLNG and all that goes with it, including the pipelines and infrastructure at a good time,” he says.
“I really believe the timing of the whole LNG business in Oman came at the right time in our history and since then we’ve never looked back.”
The diversification of industries in Oman whether on the LNG side, the petrochemical side and steel clusters shows the importance attached to gas.
Gas-associated industries have contributed to Omani employment, and current estimates suggest LNG and the domestic gas-based industries, including the Oman Refineries & Petroleum company, which OLNG supports, contribute over 15% of the Sultanate’s overall revenue.
Of course the economic imperative for the project needed to exist as well, and this was accomplished by entering into long-term agreements with Korea and Japan.
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Korea Gas Corporation (KOGAS) dominates the volumes committed; taking an annual quota of 4.1 million tonnes of LNG each year in a deal running from April 2000 to December 2024. Osaka Gas of Japan and Itochu Corporation are signed up for 700,000 tonnes apiece until 2024 and 20205 respectively.
“We formed some very good sales and purchase agreements with our friends in Korea and Japan, and since then we have established a fantastic relationship with our partners in the upstream, midstream LNG- the likes of Shell, Total and Partex, as well as a great partnership with the buyers,” he says.
News about Oman’s oil and gas activities is always exciting. Petroleum Development Oman, the foremost hydrocarbon exploration and production company in Oman, which is responsible for approximately 90% of the country’s oil production and virtually all of its natural gas supply, has recently announced a significant gas find in the northern part of its concession area.
The Mabrouk Deep, some 40km west of Saih Rawl, Oman’s main gas field, has estimated in-place volumes amounting to 2.9 trillion cubic feet of gas and 115 million barrels of condensate. Exploratory drilling took place last year at depths of up to 5,000 metres and a large field of some 60 km² was located.
In addition, there were five new oil discoveries in 2012, amounting to approximately 300 million barrels of stock tank oil initially in place, from Shuaiba and Gharif reservoirs.
“The scale of the find at Mabrouk is tremendous news for Oman as it will enable a further significant boost to economic growth and social development,” said PDO managing director Raoul Restucci in a statement released by the company.
“The discovery underlines the truly excellent work that our exploration directorate is conducting to identify and appraise new hydrocarbon reservoirs which will sustain the Sultanate for many years to come,” he added.
The announcement came as PDO declared that it had enjoyed a record year with the highest every hydrocarbon production in its history, 1.24 million barrels of oil equivalent (boe) per day.
Daily oil production has stood at 566,305 barrels per day (bpd) and above PDO’s long term plateau target of 550,000 bpd. Daily production of non-associated and associated gas stood at 582,500 boepd with condensates at 92,500 bpd. The combined yield meant it was the fifth successive year that the company has increased its aggregate production figures.
“PDO accounts for around 70% of the country’s crude oil production and nearly all of its natural gas supply, so there is a huge onus on us to find and develop new fields of a challenging or “unconventional” nature to replace those that are declining,” said Restucci.
“Despite our record year, we remain as committed as ever to our primary goal of exploring and developing hydrocarbons in a sustainable, efficient manner to the benefit of all our stakeholders by using new technology and pioneering techniques such as enhanced oil recovery (EOR).”
Restucci has also said that the focus in 2013 is to see an intensification of effort in key areas such as exploration, EOR, business efficiency ICV and social investment. He highlighted the fact that the exploration directorate is planning to drill around 100 wells over the next five years and spend more than $800 million in its search for new reservoirs.
Between now and 2022, there will also be 16 significant new projects comprising over $11 billion of investment and targeted at developing over a billion barrels of oil.
Last year, the company made a $26 billion investment in hydrocarbon exploration and production activities over five years. According to Restucci, the projected investments cover oil and gas operations and employment opportunities in hydrocarbon streams.
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Restucci stated that PDO has set a target of creating 4,000 Omani jobs per year over the five-year business plan. With the doubling of global energy demand projected by 2050, the Middle East will continue to be a significant supplier of gas, as demand for gas increases, there is a much greater responsibility and economic imperative for IOCs and NOCs to find and extract it.
“We have to continuously find and invest in the best talent and technology to discover and recover gas and review the entire supply chain to make sure the exploration and development process is more economical,” said Restucci.
Deeper and together fields mean drilling further down and for longer, creating its own known-on effects in terms of environmental safety and social consequences.
“For PDO this means not only complying with increasingly more stringent HSE rules and
regulations but also achieving and retaining a social license from the communities where we operate. We need and want their consent to operate and this means investing in vital infrastructure, education, vocational training and job creation in those areas,” he explained.
The company also recently commissioned the country’s first solar Enhanced Oil Recovery (EOR) project alongside GlassPoint Solar. Thermal EOR is a technique used to facilitate the recovery of heavy oil with the injection of high pressure steam which can increase the temperature of oil reserves and change reservoir consistency.
By harnessing the sun’s energy with GlassPoint’s enclosed trough technology, the solar EOR project produces a daily average of 50 tonnes of emissions-free steam that can be fed directly into existing thermal EOR operations at PDO’s AMal West field in Southern Oman.
The 7MW system is in regular operation and recently passed its first performance acceptance test since coming online, exceeding contracted steam output by 10%.
“PDO has successfully extended the life of its heavy oil assets by deploying innovative EOR technologies over the past few decades,” said Restucci.
“The GlassPoint system is proving it can reliably fuel thermal EOR with solar power while reducing the need to burn natural gas. This solar EOR solution provides for an economically viable and environmentally sustainable long term resource to develop Oman’s heavy oil portfolio, while saving valuable natural gas resources for use in other gas-dependent industries.”
Oman has proven to be a very ideal place for GlassPoint to develop its operations. Heavy oil, plenty of solar energy and limited gas supplies have given the California-based company a perfect environment to operate in.
Today, EOR applications account for a significant portion of Oman’s annual natural gas consumption. By incorporating solar steam, PDO can significantly reduce the amount of natural gas it burns to produce steam for EOR.
GlassPoint’s solution can cut natural gas used for EOR by up to 80 percent, helping Oman release its natural gas resources for higher value applications such as power generation, desalination, industrial development or export as LNG.
“Preliminary results from this project demonstrate that solar steam generated with GlassPoint’s Enclosed Trough architecture is equally effective as natural gas for thermal EOR,” said Dr. Syham Bentouati, Head of New Technology Implementation at PDO.
“This unit serves as a performance and operational baseline for future solar steam generation projects in Oman, providing us with valuable information for planning potential future large-scale solar steam projects.”
“GlassPoint came with an innovative solution, which was the only solar solution designed for EOR at the time and seemed to have good potential to provide a viable option for making steam from a renewable energy source and saving natural gas for other applications,” she adds.
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Aggreko in Oman
Phil Burns, managing director for Aggreko Middle East, speaks about Aggreko’s history in Oman.
Aggreko first entered Oman back in 1996, back then the operation started with a handful of staff working out of a small depot in Muscat providing generator rental services to customers primarily in the oil and gas, and construction industries.
In the last 17 years the company has grown its business to now cover the entire country and operate with a staff of 45 full-time employees out of its Muscat depot and a service centre in Mukhaizna.
“While the oil and gas, and construction sectors still represent the majority of our business, we have over time developed a significant presence in the local events industry providing both power and temperature control solutions to many of the larger events that visit the Sultanate,” says Burns.
“Our growth in Oman has been consistent and fits in line with the impressive development of the country which has been achieved through the vision and drive of HH Sultan Qaboos bin Said al Said,” he adds.
Due to the strong focus on developing sufficient civil infrastructure that matches the growing demands of the country, Oman has never witnessed major power deficiencies, according to Burns. “This has meant that when gaps have appeared, Aggreko has been well placed to fill these gaps while permanent capacity was put in place.”
Aggreko played a major role during the devastating cyclones Gonu in 2007 and Phet in 2010 that struck the country.
“We were able to mobilize our entire fleet to provide power to critical infrastructure and outlying villages across the country,” he remembers. “To cope with the huge requirements and offer as much support as we could, Aggreko brought equipment in from the UAE to help restore power and ensure continuous supply to key institutions such as hospitals and emergency services.”
EXPRO’s Hussein Elsisi opens up on business is in Oman
“There is currently more work in Oman in general,” says Hussein Elsisi, regional business development manager for Expro, an international oilfield service company which surveys and manages oil and gas wells, from exploration through to development and production. “We continue to see more tenders and requests for quotations.”
Expro activity in Oman is set to change dramatically over the coming year, according to Elsisi. “We have won a fluids sampling and analysis contract with Petroleum Development Oman, the fluids contract was a significant win for us because it re-establishes us in Oman, and gives us a position to build from.”
The five year contract will allow Expro to re-enter the country and push its technologies and services to increase its presence, either directly or through its partners.
“Oman is trying to increase its production capacity, control the depletion and manage costs,” says Elsisi.
“In the last few years, the region has been awarded new concessions and signed new PSA with more operators,” he adds. The company has utilized its Down Hole Video technology with PDO and Oxy and is promoting its clamp on meter services in the country as well.
