Petroleum Development Oman: Difference between revisions

| name = <big>{{lang|ar|شركة تنمية نفط عمان}}<br></big>Petroleum Development Oman

| owner = [[Oman|Oman Government]] - 60% <br> [[Royal Dutch Shell]] - 34% <br /> [[Total S.A.|TotalTotalEnergies]] - 4% <br /> [[Partex]] - 2%

| logo = Petroleum_development_oman_logo.jpg

| num_employees = 8,500

| type = [[Government-owned corporation]]

| foundation = 1937 (as '''Petroleum Development of Oman and Dhofar''' ) <br />1967 (as '''Petroleum Development Oman''' )

| location = [[Muscat, Oman|Muscat]], [[Oman]]

| industry = [[petroleum|Oil &and Gasgas]]

| revenue = $11.4 billion (2007)

| homepage = [{{url|http://www.pdo.co.om/ |Official Website]website}}

'''Petroleum Development Oman''' ('''PDO''') is the leading exploration and production company in the [[Sultanate of Oman]]. The Company deliver'sdelivers the majority of the country's crude oil production and natural gas supply,. butThe abovecompany allis itowned focus'sby onthe deliveringGovernment excellenceof Oman (with a 60% interest), growthRoyal Dutch Shell (34%), TotalEnergies (4%) and sustainablePartex value(2%). creationThe withinfirst economic oil find was made in 1962, and wellthe beyondfirst ouroil consignment was exported in industry1967.

IPC created an associate company, Petroleum Development (Oman and Dhofar) Ltd, to operate the concession. The company had the same five shareholders as IPC, four of which had an interest of 23.75%: the [[Royal Dutch/Shell]] Group, the [[Anglo-Persian Company]] (which would eventually become the [[British Petroleum]] Company, or BP), [[Compagnie Française des Pétroles]] (a predecessor of today’stoday's Total) and the [[Near East Development Company]] (whose shareholders were [[Standard Oil of New Jersey]] and [[Socony-Vacuum]], today’stoday's ExxonMobil), and the remaining 5% stake being held by the fifth shareholder, Partex, representing the interests of the oil magnate, [[Calouste Gulbenkian]].

|publication-placelocation = Aylesford, Kent, United Kingdom

|publication-date = May 2006
|edition = 1st

|publication-placeol = Dublin19239282M

|publication-date = 2000

Further dry wells were drilled and this lack of success, combined with worsening logistical problems and a glut of oil on the world market, led most of the partners to withdraw from the venture in 1960. Only Shell and Partex opted to remain in Oman to continue the search for oil. The first successful findings, on an commercially relevant level, were made at [[Yibal]] in April 1962.<ref>{{cite web|last=PDO|title=PDO's History|url=http://www.pdo.co.om/expatriate_site/pdohistory.htm|accessdateaccess-date=12 April 2013|archive-url=https://web.archive.org/web/20130316121015/http://www.pdo.co.om/expatriate_site/pdohistory.htm#|archive-date=2013-03-16|deadurl-url=yes|dfstatus=dead}}</ref>

All through the 1970s, PD(O) strove to maintain its production and replace its reserves while developing its professionalism. Some significant discoveries early in the decade contributed to that objective: [[Ghaba North]] in 1972, followed by [[Saih Nihayda]], [[Saih Rawl]], [[Qarn Alam]] and [[Habur, Oman|Habur]]. All five fields were on stream by 1975, the crude oil being transported via a new {{convert|20|in|mm|adj=on}} pipeline to the main pipeline 75 kilometers east of Fahud. Thanks in part to these new sources of oil, production averaged {{convert|281778|oilbbl/d|m3/d}} (bpd) in 1972 and {{convert|341000|oilbbl/d|m3/d}} in 19751976/76.

The first half of the 1970s was important for other reasons as well. On 1 January 1974 the Government of Oman acquired a 25% shareholding in the Petroleum Development (Oman); six months later the shareholding was increased to 60%, backdated to the beginning of the year. As a result, the foreign interest in PD(O) was now made up of the Shell (34%), Compagnie Française des Petroles (4%) and Partex (2%). These shareholdings have remained unchanged to the present day. (The Companycompany, however, underwent a change six years later. On 15 May 1980, it was registered by Royal Decree as a limited liability company under the name Petroleum Development Oman — now without parentheses in its name. Its current [[nautilus]] logo was also introduced then.

By the end of 2000 PDO witnessed an increase in production. This was due to the increase in production arose from the application of the latest technology to increase [[Petroleum extraction|oil recovery]] in existing fields. And some of the production increase over the years was made up of "new oil" from fields that were not only found but also developed at an ever-accelerating pace. During the period 1967-19801967–1980 all of PDO’sPDO's production came from 11 fields; by 1988, 50 fields provided the sum total of PDO’sPDO's oil output; by 1990 it was 60, and in 1999 it was nearly 100.

When PDO's gas-exploration campaign in the early 1990s made it clear how bountiful the country's gas fields were, the Government decided to establish a completely new industry: the export of [[liquefied natural gas]] (LNG). In 1996 PDO concluded an agreement with the Government to develop the central Oman gas fields in order to supply gas to an LNG plant in Qalhat, near Sur. To fulfill its end of the agreement, the Companycompany had to drill wells, hook them up to a new gas processing plant at Saih Rawl, and then transport the processed gas via a 352-kilometre pipeline to Qalhat. Furthermore, PDO would then be responsible for guaranteeing the delivery of gas for 25 years.

Having built up such momentum in its oil production as it entered the 1990s, the Company fully expected the trend to continue. Unfortunately, the Company’scompany's field-development strategy for the start of the 21st century – based on incremental infill drilling with horizontal wells and extensive waterflooding – had its momentum dissipated before the waterflooding projects, which require comprehensive reservoir studies, could be fully implemented. The natural production-rate decline of its major oil fields eventually caught up with the Company at the start of the millennium. In 1997, the 35-year old [[Yibal]] field began to decline in production. Two scientific papers published in 2003 showed a decline of about 12 percent annually since 1997, with 5 percent being the regional average.<ref name="Oman">{{cite web|url=https://www.nytimes.com/2004/04/08/business/oman-s-oil-yield-long-in-decline-shell-data-show.html|title=Oman’sOman's oil yield long in decline, Shell Data Show|date=2004|work=New York Times|accessdateaccess-date=November 15, 2018}}</ref>

Following a comprehensive review in 2002 that led to a sweeping change programme, PDO laid out ambitious production-recovery plans based not only on waterflooding but also on enhanced oil recovery (EOR) techniques: the application of heat, chemicals or gas solvents to alter the way oil or injected water flows in a reservoir. But, in order for them to be sustainable in the long run, the plans had to be executed for substantially less money than originally envisaged, making them all the more challenging. A total of $2 billion in cost savings over the five-year period 2002–2008 were incorporated into the Company’scompany's budget. Fortunately, because of the long-term nature of investments that would be required, the Omani Government agreed at the end of 2004 to extend PDO’sPDO's exploration and production concession and operating agreements for 40 years – until 2044.

Meanwhile, gas continues to be a growth area for the Companycompany. A new gas-processing plant was commissioned in Saih Nihayda in 2005, and another one is due in 2008 for PDO's newest gas field in Kauther. With the addition of those two processing plants, nearly one-third of the hydrocarbon energy that PDO supplies will come from natural gas—the fuel that has a central role in the Government’sGovernment's economic diversification plans.

Faced with oil prices above [[United States dollar|$]]100 a barrel and sinking field capacities, PDO was one of the many companies to introduce in-site combustion, an [[enhanced oil recovery]] technique involving lighting fires within the reservoirs, in 2008.<ref>{{cite webnews|url=https://www.washingtonpost.com/wp-dyn/content/article/2008/08/11/AR2008081102210.html|title=Thirst for Oil Feeds Innovation in Oman|date=August 12, 2008|worknewspaper=Washington Post|accessdateaccess-date=November 15, 2018}}</ref>

In 2010, the company announced the discovery of three new oil- and one gas field.<ref>{{cite web|url=https://www.ft.com/content/034c152c-d027-11df-bb9e-00144feab49a|title=Oman walks energy balance tightrope|date=October 5, 2010|work=Financial Times|accessdateaccess-date=November 15, 2018}}</ref>

Since 2010, PDO has been working on the [[Miraah]] Solar Project, a 1,021 mega[[watt]] [[Solar thermal energy|solar thermal]] facility, which is to be used in [[Enhanced oil recovery|EOR]] from 2017/2018 onwards.<ref>{{cite web|url=https://www.wsj.com/articles/oman-to-build-giant-solar-plant-to-extract-oil-1436344310|title=Oman to Build Giant Solar Plant to Extract Oil|date=July 8, 2015|work=Wall Street Journal|accessdateaccess-date=November 15, 2018}}</ref><ref name="power">{{cite web|url=https://www.power-technology.com/projects/miraah-solar-thermal-project/|title=Miraah Solar Thermal Project|date=|work=Power Technology|accessdateaccess-date=November 15, 2018}}</ref>

In 2011, a series of strikes and protests took place in Oman that also involved hundreds of PDO workers demanding higher wages.<ref>{{cite web|url=https://www.ft.com/content/fd4cd0ba-4f03-11e0-9c25-00144feab49a|title=Oman protesters demand corruption investigation|date=March 15, 2011|work=Financial Times|accessdateaccess-date=November 15, 2018}}</ref>

Since the decline of natural production capacity, PDO has invested heavily to keep up and try to increase production again. Having to rely on marginal wells and enhanced oil recovery techniques more and more, the overall quality of oil is ''getting heavier and drifting down'' said the director of Purvin & Gertz, an international energy consulting firm, in 2011.<ref>{{cite web|url=https://www.nytimes.com/2011/07/21/world/middleeast/21iht-M21B-DUBAI-OIL.html|title=Dubai Exchange Faces Steep Climb on Crude Oil Deals|date=July 20, 2011|work=New York Times|accessdateaccess-date=November 15, 2018}}</ref>

In 2013, a team of members from Manpower Ministry and Oman's Trade Union Federation found nearly 50 labor law violations and mistakes in safety norms during an inspection at PDO's [[Fahud]] facilities.<ref>{{cite web|url=https://gulfnews.com/news/gulf/oman/pdo-contractors-violate-safety-and-labour-laws-1.1135440|title=PDO Contractors violate safety and labour laws|date=January 21, 2013|work=Gulf News Oman|accessdateaccess-date=November 15, 2018}}</ref>

In 2014, [[P. Mohamed Ali]], the former managing director of [[Galfar Engineering and Contracting]], was sentenced to three years in jail for bribes made to PDO. In the same year Juma Al Hinai, the former head of the tender committee at PDO, was also charged with bribery and sentenced to three years in jail, including a fine of 600,000 [[Omani rial|rials]]. He was banned from public office for 20 years.<ref>{{cite web|url=https://uk.reuters.com/article/uk-oman-trial-verdict/oman-government-official-two-executives-jailed-fined-for-graft-idUKBREA0B0CE20140112|title=Oman government official, two executives jailed, fined for graft|date=January 12, 2014|work=Reuters|accessdateaccess-date=November 15, 2018}}</ref><ref>{{cite web|url=https://www.reuters.com/article/us-oman-corruption-sentences/oman-court-jails-businessman-to-15-years-over-bribes-idUSBREA280I020140309|title=Oman court jails businessman to 15 years over bribes|date=March 9, 2014|work=Reuters|accessdateaccess-date=November 15, 2018}}</ref> Subsequently, the head of PDO warned all contractors to adhere to [[OECD Anti-Bribery Convention|anti-bribery]] and -corruption policies.<ref>{{cite web|url=https://blogs.wsj.com/riskandcompliance/2014/04/09/corruption-currents-from-too-fast-to-fail-to-heartbleed-bug/|title=Corruption Currents: From Too Fast to Fail to Heartbleed Bug Sparks Security Panic|date=April 9, 2014|work=The Wall Street Journal|accessdateaccess-date=November 15, 2018}}</ref>

In 2016, PDO launched a $3.4 billion loan program with [[HSBC Bank Middle East|HSBC bank]].<ref>{{cite web|url=https://www.reuters.com/article/pdo-loans/lpc-omans-pdo-says-raising-approx-us3-4bn-loan-idUSL4N18T3YE|title=LPC-Oman's PDO says raising approx. US$3.4bn loan|date=June 1, 2016|work=Reuters|accessdateaccess-date=November 21, 2018}}</ref> In the same year, PDO signed a contract with [[GE Oil and Gas|GE Oil & Gas]] to provide [[Progressive cavity pump]] (PCP) equipment and related services from late 2016 onwards.<ref>{{cite web|url=https://timesofoman.com/article/92971|title=GE signs major contract with Petroleum Development Oman|date=September 26, 2016 |work=Times of Oman|accessdateaccess-date=November 21, 2018}}</ref>

In 2017, following many years of reconstruction and oilfield optimization, PDO confirmed a new combined oil, gas and condensate production record (1.293 million [[Barrel of oil equivalent|barrels of oil equivalent]] per day, BOE) for 2016. The company is still faced with a low price environment and continues to work on cost controlling measures.<ref>{{cite web|url=https://timesofoman.com/article/106275|title=Petroleum Development Oman sets new production record|date=April 3, 2017|work=Times of Oman|accessdateaccess-date=November 21, 2018}}</ref><ref>{{cite web|url=https://timesofoman.com/article/106953/Oman/Petroleum-Development-Oman-gives-guests-an-overview-of-the-companys-performance|title=Petroleum Development Oman gives guests an overview of the company’scompany's performance|date=April 12, 2017|work=Times of Oman|accessdateaccess-date=November 21, 2018}}</ref> The company in 2017 also celebrated 50 years of oil exports and announced a continually growing expansion into [[hydrocarbon]] and [[renewable energy]] generation and [[Water resource management|water management]] – turning PDO into a fully diversified energy company. Around 80% of operations are estimated to remain in the oil and gas sector until 2027.<ref>{{cite web|url=https://timesofoman.com/article/113695|title=50 years of oil exports by Oman|date=July 26, 2017|work=Times of Oman|accessdateaccess-date=November 21, 2018}}</ref><ref>{{cite web|url=https://timesofoman.com/article/118462|title=Petroleum Development Oman plans to focus more on renewable energy|date=October 2, 2017|work=Times of Oman|accessdateaccess-date=November 21, 2018}}</ref>

The largest onshore discovery in 2018 was a gas-condensate area, found on the Mabrouk North East field, operated by PDO.<ref>{{cite web|url=https://financialtribune.com/articles/energy/90719/2018-discovered-petroleum-resources-increase-30|title=2018 Discovered Petroleum Resources Increase 30%|date=July 30, 2018|work=Financial Tribune|accessdateaccess-date=November 21, 2018}}</ref>

The Board consists of twelve members and includes the Chairmanchairman, who is the Minister of Oil & Gas His Excellency Dr. Mohammed bin Hamad bin Saif al Rumhy, who represents the Government of Oman and representation from PDO’sPDO's private shareholders, Royal Dutch Shell, Total and Partex.​

The Managing Director’sDirector's Committee (MDC) shares responsibility for the Company’scompany's overall performance and business direction. The Committeecommittee is headed by the Managingmanaging Directordirector who is assisted by fifteen other Directors, who are responsible for setting the technical standards, the allocation of staff and their development.

PDO operates in a concession area of about 90,000 km2 (one third of Oman’sOman's geographical area), has around 130 producing oil fields, 14 producing gas fields, around 8,000 active wells, a diverse workforce of more than 8,500 employees of 64 nationalities, and more than 45,000 contractors.

PDO finds oil fields and develops them into productive assets by drilling wells and constructing and operating various [[hydrocarbon treatment]] and transport facilities. The [[crude oil]] that is produced from the fields is not sold by the Companycompany but rather delivered to a storage facility at [[Mina al Fahal]], where it is loaded onto seagoing tankers at the discretion of the Companycompany's shareholders. As such, the Company does not earn any money from the sale of oil; its shareholders do. The shareholders in turn cover all budgeted operating and capital expenditure.

Since 2010, PDO has been working together with partnering [[GlassPoint Solar|GlassPoint]] to create the [[Miraah]] Solar Project, a 1,021 mega[[watt]] solar thermal facility which has been under construction in Southern Oman since 2015. The facility produces steam, which will be used for thermal [[enhanced oil recovery]] (EOR), extracting [[Heavy crude oil|heavy oils]] from the Amal oilfield. The plant is one of the largest solar plants in the world and will generate around 6,000 [[ton]]s of solar steam every day, and by replacing the current EOR system which relies on the burning of natural gas, it will reduce [[Carbon dioxide|{{CO2}}]] emissions by over 300,000 tons annually.<ref name="power" />

Since 2011, PDO has received various awards for the Nimr Reed Beds water treatment plant, including The Global Water Award, presented to [[Bauer AG|BAUER]] water by [[Kofi Annan]] in 2011,<ref>{{cite web|url=https://lectura.press/en/article/kofi-annan-presents-global-water-award-2011-to-bauer-water/646|title=Kofi Annan presents Global Water Award 2011 to BAUER Water|date=May 11, 2011|work=Lectura Press|accessdateaccess-date=December 18, 2018}}</ref><ref>{{cite web|url=https://www.shell.com/sustainability/environment/water/a-natural-filter-for-water.html|title=A natural filter for water|date=|work=Shell|accessdateaccess-date=December 18, 2018}}</ref> the Shell Award for the Best Innovative Project.<ref>{{cite web|url=http://www.ipieca.org/resources/case-study/a-natural-filter-for-water-the-nimr-reed-beds/|title=A natural filter for water – the Nimr reed beds|date=August 2016|work=IPIECA|accessdateaccess-date=December 18, 2018}}</ref> In 2012 PDO won the Oman Green Innovation Award, the ADIPEC Best [[MENA]] Oil and Gas HSE Award and an award for Excellence in Environmental Project and Products by the Regional Clean Sea Organisation (RECSO) that same year.<ref>{{cite web|url=http://www.pdo.co.om/en/about/awards/Pages/default.aspx|title=Awards|date=2016|work=Petroleum Development Oman|accessdateaccess-date=December 18, 2018}}</ref><ref>{{cite web|url=http://www.pdo.co.om/en/technical-expertise/nimr-reed-beds/Pages/default.aspx|title=Technical Expertise, Nimr Reed Beds|date=|work=Petroleum Development Oman|accessdateaccess-date=December 18, 2018}}</ref> In 2013, PDO won almost 20 awards, including different awards for their Amal Solar project, the Oman Green Innovation Awards for the Ras Al Hamra International School.<ref>{{cite web|url=https://icsadviseurs.nl/innovatieve-leeromgeving-voor-het-international-primary-curriculum-in-muscat-oman/|title=Innovatieve leeromgeving voor het International Primary Curriculum in Muscat, Oman|date=|work=icsadviseurs|accessdateaccess-date=December 18, 2018}}</ref> In 2015, PDO won four different [[Royal Dutch Shell|Shell]] Impact International Impact Awards.<ref>{{cite web|url=https://muscatdaily.com/Archive/Oman/Shell-Impact-Award-winners-honoured-3wvo|title=Shell Impact Award’Award' Winners honoured|date=|work=MuscatDaily|accessdateaccess-date=December 18, 2018}}</ref> Amongst the awards in 2016, the company was awarded the APIPEC award for Best Oil and Gas [[Corporate Social Responsibility]] (CSR) Project, and the Best Practice Award for early [[monetization]] of new discoveries through Early Development Facilities.<ref>{{cite web|url=https://www.oilandgasmiddleeast.com/article-16365-the-winners-of-adipec-2016-awards-announced|title=The winners of ADIPEC 2016 Awards announced|date=November 10, 2016|work=OilandGas|accessdateaccess-date=December 18, 2018}}</ref>

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