Gas to overtake oil production in Oman by 2023, says Rystad
The non-Opec producer has boosted gas production to stave off output declines from its maturing oil fields
Gas production is set to overtake crude in Oman by 2023 due to a surge in the output of cleaner fuel, according to a study.
“Gas is on the rise in Oman, and this transition is very timely. Oil output declines over the last two years may indicate a point of no return for Omani oil, but the country’s sliding oil production is set to be replaced by gas,” said Aditya Saraswat, an analyst with Norway's Rystad Energy.
Oman is not a member of Opec. The sultanate is one of the smaller hydrocarbon producers in the Gulf, with some of the highest breakeven prices for crude. Oman has sparse gas resources compared to its regional peers and recently undertook efforts to boost output by tapping into some of its tighter reserves.
BP for instance is engaged in the development of Oman’s massive tight gas field at Khazzan, from where production is expected to reach 1.5 billion cubic feet per day, when completed. The gas field, which will see an estimated $16 billion (Dh59bn) in investment, currently produces 1 billion cf/d of gas and around 35,000 barrels per day of condensate.
Oman’s crude production meanwhile has been on the decline, largely due to its maturing fields and difficult terrain, which makes exploration and production an expensive proposition for international energy companies.
Crude production hit peak in 2016, reaching 900,000 bpd and has since declined to 870,000 bpd by 2018.
Rystad estimates that production will continue to fall, decreasing by an additional 200,000 bpd by 2025, as older fields continue to see production declines.
Oman’s gas production meanwhile will increase by 130 million cubic metres per day, changing the overall fuel mix from 35 per cent gas in 2015 to 50 per cent by 2025.
“Amidst rising global liquefied natural gas (LNG) demand and the increasingly lucrative domestic gas market, international players are favouring gas developments in Oman,”said Mr Saraswat. "The strengthened gas market will help gas production levels to outshine Oman’s dwindling oil production, with gas output projected to overtake oil by 2023.”
Updated: March 5, 2019 04:33 PM