Muscat: Oman plans to produce an average of one million barrels of crude oil per day this year, despite a production cut of 45,000 barrels a day agreed with oil exporting Opec bloc, a top-level official at the Ministry of Oil and Gas said.
“Production-wise, we are going to maintain the one million barrels per day. Our share in production cut is 45,000 barrels a day and we have already started reducing the production. But we see this as a short-term (phenomenon),” said Salim Al Aufi, undersecretary at the Ministry of Oil and Gas, while addressing the fourth Argus Middle East Crude Conference here on Monday.
However, Al Aufi said that the country’s production target in the first six months of 2017 is projected at 970,000 barrels per day. After June, Oman can go back to the original production target, depending on any possible agreement at that point of time.
The total crude oil production of the country last year grew by 2.6 per cent to 367.56 million barrels, equivalent to an average of 1,004,300 barrels per day, according to the latest data released by the National Centre for Statistics and Information (NCSI).
This was the first time that the country could produce more than one million barrels per day.
However, Al Aufi said that the country is building its capacity for oil production and “getting a lot of support from operators in maintaining the activity level and in building capacity.”
The undersecretary also noted that all oil exporting countries, including Opec members, have already reduced crude oil supply by 1.5 million barrels per day, against a commitment of 1.8 million barrels a day.
Al Aufi added that the focus of the country will be on strengthening production capacity of natural gas as Oman has long-term commitment for supplying gas to industries. > B2
The average operating cost of crude oil fell by a dollar per barrel to $8.3-8.5 a barrel from $9.3 per barrel last year, thanks to improved production and reduction in cost. Khazaan tight gas project is progressing well to start production by the fourth quarter of this year. “We are targeting to commerce production from Khazaan in the fourth quarter of this year as per our plan. All wells are being drilled. Hopefully by June, we will start commissioning of the plant and in August, one of the gas processing trains will start operation and the second one will follow suit,” added Al Aufi. Another solar steam generation project in Rima is also on schedule and will help the country in diversifying steam generation for oil and gas industry. Referring to Salalah LPG project, he said that the Sultanate will be able to strengthen its LPG exports once the project start operation in late 2019.
The Middle East Crude Conference was organised by Argus Media. With the specific focus on the Middle East region, the conference brought together national and international oil companies, crude oil traders and refiners.