The decision to extend the concession agreement until 2042 is designed to provide security for the partners as PDO undertakes a multibillion-dollar enhanced oil recovery (EOR) programme, aimed at boosting dwindling production from mature fields. An $850 million EOR project is under way in the Harweel area and shareholder approval will be sought in mid-2004 for a $1,500 million-2,000 million EOR scheme at Mukhaizna (see above).

In 2003, PDO's production, which accounts for about 90 per cent of the sultanate's total output, was about 703,000 barrels a day (b/d). The company is targeting 650,000 b/d in 2004.

PDO is a joint venture between the government, holding 60 per cent, the Royal Dutch/Shell Groupwith 34 per cent, Partexof the US with 4 per cent and France's Totalwith 2 per cent.