MUSCAT: Oman’s oil reserves slipped just over 3 percent in 2009 as the country failed to find as much oil as it produced, according to official data in the country’s annual central bank report.
Oman is a small independent oil producer in a region housing OPEC’s largest crude exporters, but its oil has a big influence on international markets, as it is used in benchmark pricing for around 12 million barrels per day (bpd) of crude exported from the Middle East to Asia.
The sultanate is drilling more wells to better understand the amount of oil in its Al Ghubar South field, which it estimates could contain a billion barrels. That would add over 20 percent to its reserves.
At the end of 2009, Oman’s oil and condensate reserves stood at 4.826 billion barrels, down from 4.978 billion barrels at the end of 2008, according to the central bank report.
Oman’s largest oil producer is state-run Petroleum Development of Oman, which has a 40-year production-sharing agreement PSA that was signed in 2005. Royal Dutch Shell, Total and Partex are shareholders in PDO.
The PSA stipulated that the company would aim to sustain crude and condensate reserves at around 4.7 billion barrels for the lifespan of the contract.
The report also said Oman was expected to produce an average of 870,000 bpd in 2010, about 8 percent more than last year. The sultanate has managed to turn around declining output, boosting production in both 2008 and 2009.
The fall in crude prices on the year meant Oman’s oil revenues fell 11.8 percent in 2009 from 2008, despite higher output. Oil income stood at 4.4905 billion Omani rials ($11.67 billion). Gas revenues also fell by 19.6 percent to 731.3 million Omani rials. The value of Oman’s exports of liquefied natural gas (LNG) slumped 39.5 percent in 2009 on the year to 969.5 million rials, the central bank report said.
"Oman LNG and Qalhat LNG combined, utilized roughly 42 percent of the natural gas produced during 2009," the annual central bank report said.
Both companies have a combined output capacity of 9.9 million tons a year, but last year Oman said it was producing 20 percent less LNG than its capacity as rising local demand ate more and more into its gas supply, leaving less for export.
Oman produced 1.097 trillion cubic feet of natural gas in 2009, up 2.6 percent from a year earlier.