PHOTO
08 November 2016
By Conrad Prabhu
MUSCAT – Petroleum Development Oman (PDO) is targeting savings of around $3 billion over a five-year period through cost optimisation, waste elimination and efficiency-driven initiatives, according to a high-level official of the majority government-owned oil and gas producer.
Haifa al Khaifi, Finance Director, said the savings are being accrued as a result of, among other initiatives, a sweeping programme of Contract Optimisation Reviews that PDO has undertaken in collaboration with its sizable contracting and vendor community.
Haifa made the comments during a panel discussion held as part of a seminar hosted by Oman France Amitie (Oman-French Friendship Association) at the Grand Hyatt Muscat on Sunday. Also sitting on the panel were Dr Mohammed bin Hamed al Rumhi, Minister of Oil & Gas, Dr Mohammed al Barwani, Chairman MB Holding Group, Musab al Mahruqi, CEO Orpic, Isam al Zadjali, CEO Oman Oil Company, and the Country Head of Total Oman.
Giving her perspective on the impact of the oil price slump on PDO’s business, Haifa said the company had embraced LEAN business practices well before the crisis hit in 2014. Since then, it has adopted a far-reaching cost optimisation and waste elimination programme in line with its mantra, ‘Never Waste a Crisis’, she explained.
A key focus area for the company, however, is to improve production in support of majority shareholder the Omani government’s economic objectives, said Haifa, noting that combined output of crude, gas and condensates presently averages 1.3 million barrels of oil equivalent per day (boepd).
While early monetisation of new discoveries is one notable strategy that is helping PDO mitigate the effects of the downturn, another focuses on enhanced well and reservoir management, the Finance Director pointed out.
The efficacy of this programme is evident from the dramatic improvement in arresting the rate of decline to 4.8 per cent presently, down from a high of 12 per cent in 2012. This compares with a global average of 15 per cent, she said.
Notwithstanding the downturn, PDO is also making a stronger commitment to technology in driving its business, said Haifa. Of the 50 – 70 technologies that are tested at PDO at any given time, two types of technologies are set to make further headway: solar-based renewables for steam injection, and reed bed techniques for disposal of produced water.
Under a partnership with German technology firm Bauer, PDO’s Reed Bed project in Nimr is helping tackle some of the colossal volumes of oil-contaminated water that is being generated alongside crude production. For every barrel of oil, PDO produces around 8 – 9 barrels of water – volumes that cost PDO sizable amounts if they are to be disposed of in deep wells. Nimr’s reed beds however handle some 750,000 800,000 bpd of produced water, yielding around 2,000 bpd of oil that adds to the company’s bottomline, she said.
Likewise, PDO’s Miraah solar project will produce 5.6 trillion BTU of steam for its heavy oil fields in Amal, offsetting the need for valuable natural gas which gas be used for value-enhancing ventures, she said.
Going forward, PDO is also keen to secure financial independent and alleviate its dependence on the government for its funding requirements, said the Finance Director. Citing its success in raising $4 billion in funding from international institutions last July, PDO has the wherewithal to raise finance for its future investment requirements, she added.
By Conrad Prabhu
MUSCAT – Petroleum Development Oman (PDO) is targeting savings of around $3 billion over a five-year period through cost optimisation, waste elimination and efficiency-driven initiatives, according to a high-level official of the majority government-owned oil and gas producer.
Haifa al Khaifi, Finance Director, said the savings are being accrued as a result of, among other initiatives, a sweeping programme of Contract Optimisation Reviews that PDO has undertaken in collaboration with its sizable contracting and vendor community.
Haifa made the comments during a panel discussion held as part of a seminar hosted by Oman France Amitie (Oman-French Friendship Association) at the Grand Hyatt Muscat on Sunday. Also sitting on the panel were Dr Mohammed bin Hamed al Rumhi, Minister of Oil & Gas, Dr Mohammed al Barwani, Chairman MB Holding Group, Musab al Mahruqi, CEO Orpic, Isam al Zadjali, CEO Oman Oil Company, and the Country Head of Total Oman.
Giving her perspective on the impact of the oil price slump on PDO’s business, Haifa said the company had embraced LEAN business practices well before the crisis hit in 2014. Since then, it has adopted a far-reaching cost optimisation and waste elimination programme in line with its mantra, ‘Never Waste a Crisis’, she explained.
A key focus area for the company, however, is to improve production in support of majority shareholder the Omani government’s economic objectives, said Haifa, noting that combined output of crude, gas and condensates presently averages 1.3 million barrels of oil equivalent per day (boepd).
While early monetisation of new discoveries is one notable strategy that is helping PDO mitigate the effects of the downturn, another focuses on enhanced well and reservoir management, the Finance Director pointed out.
The efficacy of this programme is evident from the dramatic improvement in arresting the rate of decline to 4.8 per cent presently, down from a high of 12 per cent in 2012. This compares with a global average of 15 per cent, she said.
Notwithstanding the downturn, PDO is also making a stronger commitment to technology in driving its business, said Haifa. Of the 50 – 70 technologies that are tested at PDO at any given time, two types of technologies are set to make further headway: solar-based renewables for steam injection, and reed bed techniques for disposal of produced water.
Under a partnership with German technology firm Bauer, PDO’s Reed Bed project in Nimr is helping tackle some of the colossal volumes of oil-contaminated water that is being generated alongside crude production. For every barrel of oil, PDO produces around 8 – 9 barrels of water – volumes that cost PDO sizable amounts if they are to be disposed of in deep wells. Nimr’s reed beds however handle some 750,000 800,000 bpd of produced water, yielding around 2,000 bpd of oil that adds to the company’s bottomline, she said.
Likewise, PDO’s Miraah solar project will produce 5.6 trillion BTU of steam for its heavy oil fields in Amal, offsetting the need for valuable natural gas which gas be used for value-enhancing ventures, she said.
Going forward, PDO is also keen to secure financial independent and alleviate its dependence on the government for its funding requirements, said the Finance Director. Citing its success in raising $4 billion in funding from international institutions last July, PDO has the wherewithal to raise finance for its future investment requirements, she added.
© Oman Daily Observer 2016
