Petroleum Development Oman (PDO) produced a combined total of 1.206 million barrels of oil equivalent (b/d) in 2011, its second highest level on record.

Daily crude oil production stood at 549,280 b/d along with 93,600 b/d of condensates. Associated gas production amounted to a total of 463,000 b/d, along with 85,000 b/d from non-associated field, according to Raoul Restucci, managing director of PDO, speaking at the company’s annual briefing in Muscat on 20 February.

In 2010, PDO had a daily oil production of 553,000 b/d. The company shifted its exploration emphasis in 2011 to unconventional resources, particularly from light tight oil and geologically complex basin centred gas opportunities.

Field development and recovery optimisation studies have added 266 million barrels of oil reserves and 1 trillion cubic feet (tcf) of gas reserves, the equivalent of a total of 450 million barrels, according to Restucci who added that PDO’s reserves replacement ratio is now 1.26, greater than its 2011 production.

PDO’s new steam injection project at the Qarn Alam field and sour gas injection at Harweel will “underpin key production delivery in 2012”, says Restucci.

Production at Qarn Alam began in late-2011 and is expected to increase incrementally to a plateau of 40,000 b/d of crude by 2015 or 2016. The Harweel plant was also completed in 2011, but its commissioning has been delayed. The plant is expected to come onstream by mid-2012.

Gas was discovered in 2011 at the Rabiha-1 well drilled in the north of PDO’s concession area. The well was one of four drilled, targeting unconventional gas reserves. Flow tests have been carried out and PDO plans to drill an appraisal well in 2012 to assess the reservoir distribution and commerciality.

The company will launch a new seismic data acquisition programme covering 7,500 square kilometres of the Al-Huwaisa and Yibal areas in the north of Oman.

Restucci also briefly set out PDO’s forecast for a number of future field development projects. These include the development of Yibal Attic and a further phases at Harweel by 2015, followed by Gaba North in 2016. Further ahead PDO will target the technically challenging Yibal Khuff reserves. Discovered in 1977, the fields contain sour fluids, which are high in hydrogen sulphide and carbon dioxide. This could be developed by the end of the decade.

PDO accounts for more than 70 per cent of Oman’s crude-oil production and nearly all of its natural-gas supply. The government holds a 60 per cent stake in the company, along with 34 per cent from UK-Dutch Shell Group), France’s Total, which has a 4 per cent interest and Portugal’s Partex holds 2 per cent.

Daily oil production from Oman is expected to reach 900,000 b/d by the end of 2012. The Omani government is set to sign a number of production sharing agreements with international oil companies for the development of three or four oil blocks, according to Nasser bin Khamis al-Jashmi, undersecretary at the Oil and Gas Ministry, at the sidelines of the PDO briefing.

The blocks, which are separate from the PDO concession areas were tendered in 2011 and negotiations have now been completed. The government also hopes to finalise an investment agreement in 2013 with the UK’s BP for the $15bn-plus Khazzan tight gas project.