Petroleum Development Oman Eyes Oil Output Increase in 2023

PDO Petroleum Development Oman, the biggest oil and gas producer of the Sultanate of Oman, is targeting production of 659,000 barrels per day (bpd) of oil and 90,500 bpd of condensates during 2023 – figures that roughly correspond to levels achieved in 2022.

Oil production averaged 660,894 bpd in 2022, which was 8,894 bpd higher than the planned target for the year, the majority state-owned energy company said. Condensate output at 100,172 bpd was well above target, while gas production was 62.93 million m3/d in trend with lower customer demand. Combined hydrocarbon output for the year averaged 1.17 million barrels of oil equivalent per day (boepd), PDO stated in its newly released Sustainability Report 2022.

Summing up the company’s strategy for 2023 and beyond, PDO’s Managing Director Steve Phimister stated: “As we adapt to the changing energy landscape, our direction will be guided by our strategic priorities: ensuring the cost and carbon-competitiveness of our core business – today and in the future; growing our oil and gas business safely and sustainably; and ensuring long-term portfolio resilience whilst organically diversifying revenue generation options.

We remain committed to building a sustainable and low-carbon future, not only to ensure our Company’s long-term success but also to continue generating oil and gas revenue in a cost-effective, energy-efficient manner to maximize value for the Sultanate of Oman” Phimister said.

Capital expenditure (Capex) for 2023 is projected to total around US$5 billion, with operating expenditure (Opex) estimated at US$2 billion. The targeted output of hydrocarbons is expected to generate US$9 billion net cashflow for the company’s shareholders (based on an oil price of US$50 a barrel and of US$4.5 per million British thermal units of gas), according to PDO.

While Capex and Opex figures for 2022 were roughly similar at US$5 billion and US$1.9 billion respectively, the company achieved significant savings during the years, Phimister said: “We achieved more than US$670 million in total cumulative savings against the budget, an increase of more than 21% in savings compared to 2021. Oil capital expenditure (Capex) savings of US$632 million came from a mix of our Near-Term Sustainability program (NTSP) revisions, drilling efficiencies, well optimization and project savings; Gas Capex savings of US$38 million were achieved,” he stated in the Managing Director’s Foreword.

A key highpoint of 2022, Phimister recalled, was the adoption of a new ‘Purpose and Strategy’ that sets out a new vision and mission for the PDO amid a rapidly evolving energy landscape.

“Our goal of achieving economic and environmental sustainability informs our new Purpose of ‘Building a sustainable and low-carbon future to maximize value for Oman’, which replaces our previous vision and mission,” the Managing Director said.

“In this new world, maximizing value will remain central as we fulfil our role in contributing to Oman’s Vision 2040 and reaching net zero by 2050. We are committed to both cost and carbon competitiveness – safely, efficiently and sustainably growing our core oil and gas business whilst minimizing emissions from our operations.”

It envisions commitments to, among other goals, execute carbon-competitive strategies to meet net zero ambitions, including halving PDO’s own emissions by 2030; grow oil production sustainably beyond 700,000 bpd; and organically diversify revenue streams to secure its future competitiveness.