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Oman: Oil Production and Exports
Country Study > Chapter 4 > The Economy > Hydrocarbon Sector > Oil Production and Exports

OIL PRODUCTION AND EXPORTS


During the period from 1967 to 1980, crude oil production peaked in 1976 at 365,000 bpd but subsequently declined. Producing fields are concentrated in the northern region around Jibal, Fuhud, and Natih, all three of which were discovered in the 1960s. The Dhofar rebellion inhibited exploration farther south and suspended development activity around Mamul, discovered in 1957 and holding 600 million barrels of gross proven and probable oil reserves. Because of the declining production from northern fields, total output fell. In 1979 average output was 285,000 bpd.

Once hostilities ceased in 1975 and confidence in the authority of the central government returned, southern exploration and production activities resumed, facilitating new discoveries in the late 1970s and 1980s. The Rima field, with gross proven and probable reserves estimated at 270 million barrels, was discovered in 1979; Amal, with 145 million barrels of reserves, was discovered in 1982; and Mukhaizna, with 130 million barrels, was discovered in 1985. All were brought onstream by PDO. As a result, oil output increased throughout the 1980s. Crude oil production averaged 708,000 bpd in 1991, compared with 685,000 bpd in 1990. Output for 1992 averaged 745,000 bpd. Most of this, about 670,000 to 680,000 bpd, was lifted by PDO. According to Minister of Petroleum and Minerals Said Ahmad ash Shanfari, there are plans to maintain output at that level into the twenty-first century.

Apart from PDO, which contributes the bulk of the output, three other groups have interests in the producing fields. These are Occidental Oman (28,000 bpd), Elf Aquitaine Oman (15,000 bpd), and Japex Oman (8,000 bpd).

To maintain output at current levels and avoid future declines, the government is pursuing a two-pronged strategy of developing smaller fields and applying EOR and secondary techniques at existing fields. The strategy appears successful because 1992 was the twelfth consecutive year in which production increased. However, a pattern has emerged whereby the number of fields discovered holding large (greater than 500 million barrels of gross proven and probable) reserves has been declining. The potential for discovering fields with a reserve base and production rates comparable to Jibal appears remote, given Oman's mature exploration history.

EOR techniques are applied to the mature fields. In the north, additional wells have been drilled, and water injection facilities have been constructed at the Jibal field. Gas injection is used at Fuhud and Natih. At Mamul, in the south, high-pressure steam injection techniques have been used since 1985.

Most of the increase in output will come from PDO's Al Khuwayr field in north-central Oman, where a US$500 million development project was designed to increase the field's output from 25,000 bpd to more than 120,000 bpd when completed in 1993. The project involves gas lift and water injection facilities. Output will compensate for falling output from existing producing fields. Apart from the pilot waterflood project at Al Khuwayr, near Izki, the Sayh Nuhaydah gas-condensate field is a potential candidate for an analogous waterflood development program.

More than 90 percent of oil production is exported. The majority of Oman's exports are destined for the Far East market. Japan, the Republic of Korea (South Korea), Singapore, China, Taiwan, Thailand, and the Philippines accounted for 85 percent of total crude exports in 1990. Japan accounted for 40 percent of total exports, South Korea for 26 percent, and Singapore for 7 percent. Less than 7 percent of crude exports was destined for the United States market.

All crude oil from the northern and southern fields is collected and blended into Omani export blend. The country's only refinery and terminal is at Mina al Fahl, near Muscat. The refinery, completed in 1982 with an initial throughput capacity of 50,000 bpd and expanded to 80,000 bpd in 1987, was designed to meet domestic demand for petroleum products. Operated by the Oman Oil Refinery Company, in which the Ministry of Petroleum and Minerals held a 99 percent share and the Central Bank of Oman held 1 percent, the refinery produces liquefied petroleum gas (LPG), butane, jet fuel, and two grades of gasoline.

Data as of January 1993




Last Updated: January 1993


Editor's Note: Country Studies included here were published between 1988 and 1998. The Country study for Oman was first published in 1993. Where available, the data has been updated through 2008. The date at the bottom of each section will indicate the time period of the data. Information on some countries may no longer be up to date. See the "Research Completed" date at the beginning of each study on the Title Page or the "Data as of" date at the end of each section of text. This information is included due to its comprehensiveness and for historical purposes.

Note that current information from the CIA World Factbook, U.S. Department of State Background Notes, Australia's Department of Foreign Affairs and Trade Country Briefs, the UK's Foreign and Commonwealth Office's Country Profiles, and the World Bank can be found on Factba.se.

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