Gas objectives in Oman

Oman

Oman Oil Company Exploration & Production (OOCEP) CEO Salim Al Sibani talks to TOGY about the importance of gas production in Oman, the challenges of exploiting tight gas and the company’s response to the global slump in oil prices. OOCEP is the upstream subsidiary of the state-owned Oman Oil Company.

What benefits does OOCEP see from working alongside international oil majors?
OOCEP has its own capabilities for interpreting seismic data and mapping prospective discoveries. However, working with super-major BP through our 40-percent stake in block 41 helps us to improve these abilities.
The transfer of knowledge between a national oil company such as OOCEP and an international major such as BP can make a long-term contribution to Oman’s energy industry. National oil companies can learn how to map out developments, mitigate technical risks and minimise the need for rework.
Omani companies are practising the skills they learn through co-operation in other projects. For example, OOCEP has a 20-percent stake in the Dunga oilfield in Kazakhstan, operated by Danish company Maersk Oil. We have been active in the field development plan and in optimising the cost structure.

How does the construction of the Musandam Gas Plant (MGP) encourage upstream companies to enter the Omani market?
The MGP provides the infrastructure necessary to attract oil and gas operators to invest in northern Oman. The US upstream company PetroTel has invested in exploration of blocks 17 and 40, which are both offshore Musandam.
The MGP provides particle processing and storage facilities, which add a local step in the value chain. The project will process well fluids from blocks offshore Musandam such as block 8, which is operated by Norwegian upstream oil and gas company DNO.

To what extent will the drop in gas prices affect OOCEP’s operations?
Block 60 is an example of our objective of producing unconventional resources at a conventional price. It contains the Abu Tubul tight gasfield, which requires a lot of expertise, experience and investment in order to extract the anticipated 70 mcf (1.98 mcm) of gas per day, and to reach the initial output target of 90 mcf (2.55 mcm) per day.
In order to achieve this goal, Oman must look at how the US has dealt with low natural gas prices. Omani gas prices were between $15-18 per million British thermal units in 2005, and have dropped to around $2.58 per million British thermal units in 2015.
Similarly to the US, we must combine work processes and become more efficient by collaborating with services companies.
We must cut overheads at all levels and have technical, commercial, procurement and functional support teams work together. Assessing the cost of production is more important than worrying over the price of oil and gas.

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