Muscat reverses oil output decline

25 April 2011

Using ambitious recovery techniques, Oman has succeeded in increasing production and is leading the way for new technology adoption in the region

In numbers

714,300 b/d: Oman’s oil output in 2008 before enhanced oil recovery (EOR) methods were used

816,000 b/d: Oman’s current oil production after EOR techniques were initiated

Source: MEED

In the Middle East, no other country puts as much effort into extracting its oil and gas from the ground as Oman.

Oman’s oil production peaked at 963,800 barrels a day (b/d) in 2004. Today, just 5.5 billion barrels of proven reserves remain.

Oil production is vital to the sultanate’s economic development. Oil exports account for 40 per cent of Oman’s gross domestic product (GDP) and 80 per cent of its total exports.

In 2008, oil production dropped to a low of 714,300 b/d. This prompted the government to take action. The country’s leading oil exploration and production company, Petroleum Development Oman (PDO ), was given the task of arresting the decline and increasing output, using a number of enhanced oil recovery (EOR) techniques.

PDO is a joint venture between the Oman government, which owns a 60 per cent stake, the Anglo/Dutch Shell with a 34 per cent share and France’s Total and Portugal’s Partex Oil & Gas, holding a 4 per cent and 2 per cent stake respectively.

Oman: Enhanced oil recovery pioneer

“Oman has one of the toughest geologies in the Middle East to extract oil and a lot of the accessible oil stocks are now running out,” says Jeroen Regtien, Shell vice-president for hydrocarbon recovery technologies. “This is why the country is leading the way with EOR in the region.”

Much of Oman’s oil, unlike the lighter grades found in Saudi Arabia and the UAE, is heavy, which means it is extremely viscous and thus difficult to extract from the ground. 

Oman annual oil production
YearProduction (thousand barrels a day)
f=Forecast. Source: IEA. Source: IEA

With an oil field it is usually possible to extract around 20 per cent of the oil using the natural pressure that is in the field itself. When that oil has been extracted, it is common for water or gas to be injected into one of the field’s wells to push the oil into other wells and maintain the pressure.

When the field pressure is again depleted, then a further round of extraction can take place using EOR techniques. To overcome the challenges, the EOR technologies PDO employs are varied. They can be classified into three types, thermal, chemical and miscible gas. Each type has many subsections and can be tailored to fit separate oil fields.

PDO usually decides on which method to use after carrying out extensive studies, as well as seismic surveys on its mature and diverse set of fields.

“The selection of the appropriate EOR technology is based on extensive study, experimental and field testing work,” says Sultan al-Shidhani, study centre manager at PDO.

“As these development projects are expensive, the deployment of the EOR technology is ensured by proving its suitability.” EOR projects commonly yield between 5-15 per cent incremental reserves and PDO expects its EOR projects to contribute around 20 per cent of its total production by 2020.

PDO’s first full-scale EOR project was commissioned at the Marmul field located in the southern Omani province of Dhofar in 2010. Discovered in 1956, the field is mature and produces extremely heavy, viscous crude oil, with the majority coming from the major reservoir, Al-Khlata.

Using polymers

The Marmul Polymer Project is a chemical EOR project and will add 8,000 b/d of extra production to the field’s current output of up to 70,000 b/d when it is in full operation. The project will lead to a 10 per cent increase in oil recovery from the Al-Khlata reservoir and extend the life of the field for several years.

Oman domestic oil consumption
YearConsumption (thousand barrels a day)
f=Forecast. Source: IEA

The scope of the project involved the construction of an 80,000 cubic metres a day (cm/d) water treatment plant, alongside a 17,500 cm/d polymer preparation and injection facilities station.

The technique works by mixing water with polymer to produce a viscous liquid that is effective at ‘sweeping’ the reservoir of oil.

“Polymer will gain in popularity because it is increasingly becoming the next phase of waterflood, which is the most common of secondary recovery techniques,” says Mohammed Mughairy, select manager at Australia’s WorleyParsons in Oman.

WorleyParsons is also developing a miscible gas project at the Al-Noor field, which is located in southern Oman.

The sultanate has relatively large supplies of sour gas due to the abundance of heavy oil. For this reason, the miscible gas EOR technique is gaining popularity.

The Al-Noor Field Miscible Gas Injection Project will inject sour gas into the field in order to force oil out of the production wells.

Safety issues are vital. The gas used is hydrogen sulphide (H2S). Relatively, small amounts of H2S can be lethal. Stringent health and safety measures, as well as easy access to breathing apparatus is essential on any project that uses this gas.  

Ensuring safety in Oman’s oil production

“Safety measures are the pre-requisites for all PDO operations,” says Al-Shidhani. “The high pressure facilities coupled with high levels of H2S contained in the produced fluids make health and safety a top priority.”

The thermal EOR technique is also well suited to extracting Oman’s viscous heavy oil. A number of market leading projects are currently under way in the sultanate.

The $1bn thermally assisted gas-oil gravity drainage project is being developed at the Qarn Alam field in central Oman. It is the world’s first use of the technique.

Injection wells force steam through the rock fractures underground in the reservoir, which in turn heat the oil and reduce its viscosity making it easier to extract.

The project has witnessed the drilling of 150 wells that are used for steam injection, observation, water supply and disposal, as a well as oil production. The project will initially produce 1,200 b/d after commissioning in 2012, but rise to 30-35,000 b/d over the next 30 years.

The Amal East and West fields in south Oman will also use thermal EOR. The projects are due to come on stream in 2013.

“Amal is a heavy oil field that will certainly see significant production increase and recovery with thermal EOR technologies,” says Al-Shidhani.

However, injecting oil fields with chemicals, gas or thousands of tonnes of steam every day is expensive. Producing oil using EOR can vary from about $30 a barrel up to $80 a barrel.

For projects using EOR, it is essential that the oil price remains relatively high and that enough research and development is done to decrease the cost of extraction.

So far, Oman’s EOR projects have produced some encouraging results. Currently, Oman produces 816,000 b/d of oil, which is 100,000 b/d more than in 2008 and most of its EOR projects have yet to come on stream.

But the sultanate’s shortage of available gas could curtail its EOR developments. Producing thousands of tonnes of steam every day requires a large amount of energy.

Some critics argue Oman’s oil production approach should be seen as a long-term strategy. “Oman’s decline [in oil production] has been arrested … but the effects of the EOR strategies will only be shown several years from now,” says Regtien. 

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