Oman to Invest $100 Billion in Oil and Gas Through 2022

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Written by Richard Finlayson, Senior International Editor for Industrial Info (Sugar Land, Texas)--Over the next 10 years, Oman will be making its largest-ever investment outlay, in a strategy to sustain future oil and gas output and emphasize the sector's preeminent role in fuelling the country's long-term socio-economic development. The Ministry of Oil and Gas said that investment is projected to exceed $100 billion over the next 10 years, according to the Oman Daily Observer.

"Investments in the oil sector in the 2013 to 2022 timeframe will be in excess of $60 billion to $70 billion," said Shaik Ali bin Thabit al Battashi, adviser to the ministry. In the gas sector alone, Oman will invest more than $40 billion in exploration and production activities. Thus, over the next 10 years, the country will see a gross investment in oil and gas of more than $100 billion to $110 billion.

The confidence in the future of Oman's hydrocarbon industry is reinforced by the ministry's long-term strategy for the development of the sector to 2044 and even beyond, Shaikh Ali said.

"In fact, we have been exploring with our stakeholders the possibility of extending the strategy beyond 2044, but this will take us another two to three years to accomplish," he said. "In the meanwhile, we have a maturation process right up to the year 2044. That process is aimed at harnessing Oman's estimated oil potential of over 60 billion barrels of oil in place. Up to December 2011, we only utilized 8.7 billion barrels, so there is still a lot of oil in the ground. With the price of oil of over $100 per barrel and above and with new technology constantly becoming available, we will be able to develop more of our fields."

There are indications that Oman also has a bright future in exploring and producing tight, unconventional gas. This will take time and this gas is not expected to be available before 2020 to 2022. This gas will be difficult and expensive to produce, but it will meet the requirements of Petroleum Development Oman's (PDO) enhanced oil recovery projects. To secure the future of oil production, Oman will need a lot of gas to produce this oil; that gas will partly come from the difficult reserves being explored by PDO, the ministry's adviser said.

So far, about $300 million has been invested as part of PDO's five-year gas exploration program. This initiative is simultaneous with BP's Khazzan Majarem development, deigned to offset the wedge expected from current gas supplies from PDO. As a result of these investments, production is expected to be sustained in the long-term at approximately 900,000 barrels per day of oil and 3 billion cubic feet of gas per calendar day.

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