Oman is planning to tender two of the region’s largest oil and gas projects by the end of the year. Petroleum Development Oman (PDO) has invited engineering and design firms to express interest in two enhanced oil recovery [EOR] projects worth an estimated total of up to $3bn-plus for the development of sour oil and gas fields across the country.

PDO is aiming to develop the technically challenging Khuff and Sudair reservoirs at the Yibal field in the north of the country, which are located at depths of about 3,000 metres as well as the Budour fields in southern Oman by the end of the decade.

Discovered in the 1970s, the Yibal field contain sour fluids high in hydrogen sulphide and carbon dioxide, which has meant it remains untapped.

International engineering design firms were issued an expression of interest letter on 15 February setting out the scope for the two schemes, and were asked to submit interest by 25 February.

PDO plans to tender the projects on a front-end engineering and design plus detailed engineering and procurement (feed+EP) basis. Construction contracts will be tendered separately and managed by PDO, with support from the feed+EP contractor.

According to sources in Oman, the planned contracting strategy has not been used before. “Oman has lots of local engineering, procurement and construction [EPC] contractors and there is pressure on PDO to provide opportunities for them to win work,” says one contractor.

“PDO has used similar models, with in-house feeds, but this is the first time for feed+EP. This will be the way forwards,” says a source close to the project.

The deals would be a significant boost to the Oman project market, which is often overshadowed by its Gulf neighbours. In 2011, the sultanate awarded only six major oil and gas projects, worth an estimated $1.1bn. The UAE by contrast awarded almost $3bn worth of projects in the same period. However, Oman has led the way in terms of the Gulf’s EOR projects.

Tenders for Yibal Khuff will be launched before the end of 2012, with a Feed+EP contract award by the middle of 2014 and construction contracts by 2016. PDO expects the first oil to be produced in early 2019.

PDO plans to supply untreated gas at an average of 6 million cubic metres a day (cm/d) and hydrocarbon liquids at 3,000 cm/d. The reservoir fluids will be transported from 52 new production wells to a central processing facility (CPF), to produce sweet gas and oil for export and water for disposal.  

About 200 tonnes a day (t/d) of sulphur will also have to be processed and handled, requiring a number of new units. A 45MW power station and utilities, such as nitrogen and effluent water treatment units, will also be required.

The second tender covering the Budour fields in the Greater Birba area of southern Oman will be launched in mid-2013 with a contract award in early 2014. PDO plans to bring the project onstream by the middle of 2019. There are currently four exploration and appraisal wells in the Budour field, two of which have been tested. PDO now plans to drill as many as 10 production wells and 12 water-injection wells.

The scope of the Budour project covers pipelines to transport fluids from the field to a new production facility as well as the installation of compressor, pumps and water treatment units. The scheme is part of the wider Rabab Harweel Integrated Project (RHIP), which will see the construction of new facility to allow gas injection into the Harweel oil reservoirs to maximise recovery by the end of 2017.

PDO began the Feed in mid-2011 and expects to complete design work by September this year. It will invite tenders at the end of 2012 and make a final investment decision in mid-2012.

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. The company’s daily crude oil production stood at 549,280 b/d in 2011. Oman is expected to reach 900,000 b/d by the end of the year.