Thread by @anasalhajji

Thread on oil & Gas in #Oman
1-With the passing of Sultan Qaboos on Friday and the choice of Sultan Haitham as the new leader of Oman, Oman #oil policy is expected to remain the same with the aim of increasing oil and gas production within OPEC+ framework

2-Oman producers about to 1 mb/d of crude & condensates. It is also an LNG exporter. Oman is among the very few countries in the world that announces its production figures at the end of every month. Kudos to Dr. Mohammed Al Rumhi, Minister of Oil and Gas since 1997. @Mog_Oman

3-Dr Al Rumhi is also the Chairman of the Board of Directors of Petroleum Development Oman (PDO) and Chairman of @OmanLNG
He is also a media darling, especially at the JMMC & OPEC+ meetings. Just ask OPEC journalists.

4- Oman produces about 1 mb/d of oil and about 1.3 bcf/d of gas from about 150 fields.

Medium and light sour crudes are produced in the northern fields: Al- Huwaisah, Fahud, Lekhwair, Natih, Safah & Yibal.

Heavy crude is produced in the south: Marmul, Mukhazina & Nimer

5-What is the story of PDO? How did Shell end up developing the Omani oil and gas sector despite all competition? This is explained in this thread.

6-The story of oil discovery in Oman is the story of human persistence and endurance. It has all the ingredients of a Hollywood movie: early explorers on camels’ back facing all kinds of political, social, tribal, natural, geological, and technical problems.

From 1948

7- Add to the above: rugged mountains, active seaports, and isolated desert, then add WWI and WWII, foreign interests in Oman & regional tribal wars and a local revolution!

WoW. What a mix!

Photo from 1960

8-Coal exploration
1901: First explorations efforts by the British (through India) focused on coal to prevent the French from controlling this most valuable energy source then. No coal was found. This explains why most of Oman's energy is oil and gas (some solar)

Muscat in 1900

9-Oil exploration
A few years later, the British sent a team of geologists to Oman & rest of the Gulf to search for oil (through India again). Now we know that the team proved to be the least competent team of explorers in the oil industry history. Why? see next tweet #Oman

10-The team concluded that oil might exist in the eastern part of the Gulf (Iran now) but not on the western part (Gulf States: #SaudiArabia, #Kuwait, #UAE, #Qatar, #Bahrain & #Oman).

They literally missed some of the largest oil fields in the history of the world.

11- First oil concession: The discovery of oil in Iran in 1908 forced the Anglo-Persian Oil Company, through its subsidiary, D’Arcy Exploration, to search for #oil in #Oman. The company received a two-year license in 1925 to explore oil.

12-The expedition failed because of several difficulties including the harsh environment, rugged mountains, social unrest, and lack of indications of oil deposits (from their point of view). Again, the British failed, thinking oil exists only in #Iran.

The Team of 1925

13-IPC Concession:
Iraq Petroleum Company (IPC) represented a consortium of international oil companies: R D Shell, Anglo-Persian Oil Co (later BP), Compagnie Française des Pétroles (Now Total) & a number of US oil companies (Now ExxonMobil), & Calouste Gulbenkian (Partex)

14-In 1937, IPC obtained two concessions in central Oman and Dhofar for 75 years. It created its subsidiary Petroleum Development Ltd (Oman & Dhofar) to explore for oil. That was the origin of the current PDO.

15-They went to explore in Buraimi but they had to leave after being ambushed. The local population was against any foreigners exploring for oil in the region, along with outsiders too

Surveys of the interior in 1939 failed to find oil deposits. WII stopped all activities.

16- Speaking of Buraimi region, it has been a subject of dispute for about two centuries or more. Whenever the name is mentioned, it invokes raw emotions among Omanis, Emiratis, and Saudis. Although the disputes are mostly settled legally, the emotions remain high

17-Major discoveries in Saudi Arabia in 1938 renewed interest in Oman. IPC geologists returned to Dhofar in 1948 & surveyed the province traveling on Camels. They concluded, just like others before them, that there is no oil in Dhofar. The IPC relinquished its concession in 1950

18-With more discoveries in the Gulf region, the Sultan did not give up despite several disappointing attempts.

He granted Dhofar concession to an American archaeologist who gave the concession to Dhofar-Cities Service Petroleum Corp., an American oil company.

19- The company drilled several wells in Marmul between 1955 and 1958. Although it discovered the Marmul oil field in 1957, it had to relinquish the concession in 1967 after drilling 29 wells. Nothing was proven to be commercial.

Location circled in red:

20- How did Shell end up in Oman?

After a new arrangement, IPC returned to Buriami, drilled several wells between 1956 & 1960. All were dry. By then, oil majors lowered oil prices. As a result, OPEC was created in 1960.

Dry holes forced the breakup of IPC partnership in Oman

21- Three PDO partners withdrew from the concession, leaving Shell (85%) & Partex (15%) as partners in PDO.

Earlier when the IPC relinquished its concession in Dhofar in 1950, it had to remove "Dhofar" from its name, and left "Oman", that how the current name PDO came about.

22-The “smaller” IPC started a drilling program in 1962. It discovered the Yibal oilfield in 1962, the Natih oil field in 1963, then Fahud in 1964.

Infrastructure was built.

Compagnie Française des Pétroles (Now Total) rejoined the consortium with 4% share in PDO

23-Oman started exporting oil on July 27, 1967.

PDO reacquired Dhofar concession in 1969.

In 1974, the govt bought 60% of PDO. Now PDO ownership is as follows: the govt of Oman 60%, Shell 34%, Total 4% & Partex 2%.

24- Oman's natural gas reserves are about 12 trillion cubic feet. It is used in power generation, industries, petrochemical plants, enhanced oil recovery projects, and for exports as #LNG. Oman started exporting LNG in 2000. It joined the GECF in 2011

25- LNG is exported from Qalhat to Asia, mostly Japan and South Korea. Natural gas comes from the Central Oman Gas Field complex via pipeline. Both the field and the pipeline are operated by PDO.

Oman LNG operates three LNG trains with a capacity of 10.4 mt per year

26- Oman LNG is owned jointly by suppliers and buyers. Government of Oman 51%
Shell 30%
Total 5.54%
Partex Oil & Gas 2%
Korea LNG 5%
Mitsubishi Corp 2.77%
Mitsui & Co. 2.77%
Itochu Corp 0.92%
@OmanLNG

@OmanLNG 27- PDO is also involved in one of the most interesting #Solar projects in the world: Miraah Solar Thermal Project. It will generate steam for thermal enhanced oil recovery in the Amal oilfield that produces heavy crude. Steam will replace #natgas that has a more valuable uses.

@OmanLNG 28- The majority are oil rigs. The large fluctuations reflect certain projects being undertaken and finished.

@OmanLNG 29- To conclude, here are the most important info:

1962: first oil discovery
1967: first oil exports
2000: first LNG exports

Oman produces about 1 mb/d of oil.

LNG capacity: 10.4 mt per year

The end