Oman is showing no signs of slowing investment in its oil and gas sector despite the drop in oil prices, with its largest producer Petroleum Development Oman (PDO) targeting higher production by the end of the decade.

PDO – a joint venture of the Oman government, Shell, Total and Portugal’s Partex – hit its highest level of oil production since 2006 at 570,535 barrels a day (b/d) in 2014, the group’s CEO Raoul Restucci revealed.

The Muscat-based company is now working towards a “long-term oil production plateau” of an average of 600,000 b/d in 2019, pushed up from a previous target of 550,000 b/d.

The additional oil is expected to come from new projects in the Upper Shuaiba field, the East Flank of the Rima-Marmul field and other projects including optimising enhanced oil recovery (EOR) activity and water flood management,

The announcements went against reports that Oman would slow down its oil and gas investment in the face of lower oil prices, as the sultanate is more reliant on higher-cost enhanced oil recovery (EOR) technology than its oil-exporting neighbours in the Gulf.

“EOR projects are more expensive, but they have rates of return of over 100 per cent even at these low oil prices,” said Restucci.

PDO is putting the development of the Budour field on hold for the moment due to the discovery at the Tayseer prospect enhancing the project’s potential.

Budour is one of three “mega-projects” being developed by PDO along with the Rabab-Harweel Integration Project (RHIP) and Yibal Khuff.

“Budour is paused because of a significant gas find… we have put on hold the detailed design. It is going to have to be a lot bigger,” Restucci said.

PDO has completed the front-end engineering and design (feed) for the Yibal-Khuff project in-house and said that it is on track to reach a final investment decision on the development.

The company revealed it had increased its reserves (Stock Tank Oil Initially in Place) by 8 per cent to 66.6 billion barrels over 2014. This was driven by the booking of 613 million barrels at two new discoveries the Dhulia and Bribe AsC reservoirs.

“In the past five years, we have added 700 million barrels to our production profile despite working in some of the most testing conditions in the oil and gas industry,” said Restucci.