Oman’s oil output will increase by 30,000 barrels a day (bpd) in April after the Harweel field starts production, according to Oil Minister Mohammed bin Hamad Al Rumhy.
Petroleum Development Oman (PDO) will produce an average of 915,000 barrels a day this year, state-run Oman News Agency (ONA) reported, citing the minister. Output averaged 855,052 barrels a day in February, the ministry said in a March 5 statement.
A price of $90 a barrel will meet the government’s budget estimates for this year, Al Rumhy said.
Al Rumhy said that there are new companies that will contribute to the Sultanate’s oil production during the coming period, such as OC Energy Company and other operating companies, such as BP and Occidental Mukhaizna. He pointed out that currently there are seven companies that contribute to the Sultanate’s oil production.
The Sultanate attaches great interest in developing the oil and gas exploration and excavation programmes, building the oil and gas stations and implementing non-traditional oil projects.
He added that allocations have been made for these projects in the current 8th Five-Year Plan (2011-2015).
He pointed out that new oil development for the Sultanate’s gas production is underway by BP in Khazzan and Makarem, which will produce one billion cubic feet of gas at the beginning alongside with some oil condensates.
This will increase the Sultanate’s oil production. The Sultanate’s gas production currently stands at more than 95 million cubic metres and that estimates forecast the production to hit 100 million cubic metres by the end of this year, he added.
“The Oil and Gas Ministry is currently implementing a number of new projects, such as electricity and the gas pipeline to Duqum Economic Zone which is being implemented by Oman Gas Company,” Al Rumhy added.
In response to a question on the current oil prices, he added that 25 per cent of the current oil prices are attributed to technical reasons and not to supply and demand forces.
Therefore, if the conditions remain as they are the average oil price for the current year may easily range between $120 to $125.
As for the ideal price that achieves surplus at the state budget, Al Rumhy added that oil revenues in 2012 state budget are calculated at $75 therefore having $90 will cover the deficit. If the price is more than this by the end of the year, there will be surplus at the budget.
PDO is 60 per cent owned by the state, according to its website. Royal Dutch Shell, Total and Partex Oil and Gas Group hold stakes of 34 per cent, four per cent and two per cent respectively.