Muscat seeks Iranian gas as output falls

Muscat is boosting its co-operation with Iran over gas resources, to make up for its declining oil production. Output fell by more than 6 per cent in the first quarter of the year alone.

As MEED went to press, the two were expected to sign a deal for Iran to supply the sultanate with up to 1,000 million cubic feet a day (cf/d) of gas. According to the Iranian Oil Ministry, the gas export deal will also involve an agreement on the development of the offshore Hengam oil field, which the countries jointly own.

It is the latest in a series of energy deals by Tehran with GCC states. It is also in talks with Manama to export gas to Bahrain, and is looking to sell electricity to the UAE (MEED 4:5:07).

The sultanate's oil output fell 6.2 per cent year-on-year during the opening three months of 2007, according to the National Economy Ministry. Crude production reached 64.4 million barrels by the end of March, compared with 68.7 million by the same time last year, while exports dropped 11 per cent to 56.8 million barrels. Condensate totals showed the biggest drop, falling 24 per cent to 4.7 million barrels.

Petroleum Development Oman (PDO) is implementing ambitious enhanced oil recovery programmes at three of its fields to increase production.

Gas production for the first three months of the year was up 11 per cent to 267 billion cubic feet, but demand is still expected to outstrip supply. Some of

the shortfall will be met by

gas from Qatar through the Dolphin pipeline.