Gulf Times: Shell sees drop in Oman production for a 5th year: Posted 7 December 2005
Published: Tuesday, 6 December, 2005, 09:27 AM Doha Time
DUBAI: Royal Dutch Shell Plc, Europe’s second-largest oil company, expects production from its venture in Oman to drop for a fifth year as it cuts costs and drills fewer wells to prolong the life of its fields.
Petroleum Development Oman, which pumps 90% of the nation’s oil, expects output to fall 5% to about 600,000bpd next year, said John Malcolm, managing director of the venture. That’s twice the rate of decline forecast by the International Energy Agency for Oman as a whole. “We do no favours to Oman in going all out in one year to get a feast of oil only to be followed by a year of famine,’’ Malcolm said, according to a copy of a speech given yesterday in Muscat. Output will recover after 2008, he said.
Oman is the largest oil producer in the Arabian Gulf and is not a member of the Organisation of Petroleum Exporting Countries. The nation wants to offer other international oil companies a bigger share of its reserves, eroding Shell’s position, in return for investment to help reverse a nationwide decline in output.
The Shell venture company is cutting back drilling in preference for injecting water and steam into the ground to flush out hard-to-get oil that will boost production from 2008, three years later than its planned turnaround, Malcolm said.
Occidental Petroleum Corp, the fourth-largest US oil company, replaced Shell as the government’s main foreign partner in boosting production from Mukhaizna, its sixth-largest deposit, to 150,000bpd from about 10,000bpd in May. The government wants to introduce more competition among companies to help revive output. – Bloomberg
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