KOG Talk to Chairman of Oman Oil Company and Undersecretary, Ministry of Oil and Gas

Interview: HE Nasser bin Khamis Al Jashmi

How is policy being shaped to increase in-country value (ICV) and procurement of local goods and services in the oil and gas sector?

NASSER BIN KHAMIS​ AL JASHMI: ICV has become a key policy for the Ministry of Oil and Gas. An ICV committee, which consists of the heads of upstream and downstream oil and gas operating companies, is now dedicated to this. The goal is to create ways for policy and regulations to increase the revenue remaining in-country across the value chain. In the past production used to cost $5 per barrel. Today it costs upwards of $20 per barrel. Any dollar that remains within the circulation of the national economy will have a multiplier effect, creating jobs, stimulating industry creation and bringing a number of socio-economic benefits. The sector takes this very seriously; many other countries have sent delegates to study our policy on ICV. We are taking the process step-by-step, trying not to force anything by initiating penal regulations and policies, but rather go forward with dialogue and partnerships with companies to identify opportunities available to local groups, entrepreneurs, and small and medium-sized enterprises in the country that participate in oil and gas activities.

In what ways are enhanced oil recovery (EOR) technologies being incorporated to create new methods of extracting Oman’s oil reserves?

AL JASHMI: While Oman does not have massive oil reserves compared to some in the region, we are trying to attract investors with EOR technology to help extract every last drop. Numerous companies from around the globe operate here. They are bringing the latest technology to their investments in exploration, development and production. Oman has a number of fields that had been declining in production. Thanks to applying the latest EOR technologies, many of those fields have now started to increase production. Small field clusters have also been producing significant quantities from our heavy, deep oil reserves – many of these fields had been producing next to nothing prior to EOR.

Steam injection has been one of the most prominent forms of extraction technology the industry has been utilising. Oman is one of the few oil-producing countries that applies numerous EOR techniques at the same time. Petroleum Development Oman (PDO) is currently using steam, polymer and gas extraction techniques, and we believe that the share of EOR production, as part of the gross national production, will increase over time. As a result of this, the ministry also hopes Oman can export EOR expertise and become a centre of excellence in EOR going forward.

How is domestic demand for gas affecting Oman’s reserves and export strategy? What is being done to exploit new sour, tight and deep gas reserves?

AL JASHMI: According to the ministry’s current strategy, Oman will be able to continue supplying the domestic market. However, we recognise our gas reserves are limited and will not be able to accommodate new industry demand until we book a fresh reserve of feedstock.

This is why the ministry, several years ago started to bring internationally reputed investors to invest in exploring and extracting Oman’s gas potential.

Much of our gas reserves are deep and tight, so there is much to investigate on how to best exploit these reserves. We are working on exploring all options that will contribute to our gas reserves, and PDO has been instructed to enhance their exploration programme and to look after these gas accumulations.

Tight, sour and shale gas are all on the board for exploration, and there has been some major investment commitments this year. We have attracted new entrants such as BP, Occidental, Harvest, Petrotel and Petronas through concessions in the exploration, production and development of gas blocks.

All of this is meant to bring balance back to the gas situation. We have many positive indications that the situation will improve in the coming years. Gas drives industry, and we anticipate the exploitation of unconventional gases to contribute greatly to future reserves.


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