Oman’s Condensate Production Hits Record High in 2023

Oman recorded a daily average oil output of 1.048 million barrels per day (bpd) for the full year 2023, down by 15,500 barrels from the previous year’s 1.064 million bpd.

The sultanate’s total oil production during the year 2023 decreased by 1.5% to 382.77 million barrels from 388.43 million barrels in 2022, mainly due to Oman’s continuous adherence to the OPEC+ production cuts agreement. Of the production, crude output dropped by 3.9% to 297.29 million barrels in 2023 from 309.47 million barrels in the previous year.

The decline in total oil production would have been much more significant if Oman had not substantially increased its condensate output, which is exempted from the obligations of the OPEC+ agreement.

The sultanate substantially increased its condensate output during the past three years, reaching a new annual record in 2023. Total condensates production during 2023 jumped by 8.3% to 85.47 million barrels compared to 78.96 million barrels recorded in 2022, according to the data issued by the National Centre for Statistics and Information (NCSI).

Condensate is a mixture of light liquid hydrocarbons and is typically separated out of a natural gas stream at the point of production. While Oman focuses on managing the natural decline of its oil production, it is believed that there is some scope to increase its production capacity through condensates associated with gas projects, and also some heavy oil developments.

Oil exports decline 2.4%

Oman’s oil exports saw a 2.4% year-on-year decline during 2023, primarily due to a sharp drop in shipments to India. The sultanate’s total oil exports decreased to 310.33 million barrels during 2023, compared to 317.98 million barrels recorded in 2022, as per the NCSI data.

Oman’s oil exports to India, which was the second-largest buyer of Omani crude in 2022, plummeted by 91.3% to just 2.71 million barrels in 2023, compared to 31.19 million barrels during 2022, the data showed.

India’s crude oil imports from traditional Middle Eastern suppliers have significantly declined this year, largely due to increased imports of Russian oil.

However, the sultanate’s oil exports to China, the largest buyer of Oman’s crude, increased by 10% last year, reaching 285.64 million barrels compared to 259.77 million barrels in 2022.

China accounted for approximately 92% of Oman’s total oil shipments in 2023.

On the other hand, Oman’s oil exports to Japan and South Korea significantly decreased during 2023. Exports to Japan fell nearly 20% to 9.38 million barrels, while exports to South Korea dropped by 57% to 5.21 million barrels in 2023.

The average price at which Oman sold its crude during 2023 was 13.7% lower at US$82.3 per barrel, compared to US$95.4 per barrel achieved in 2022.

Oman’s 2024 budget is based on an assumed oil price of US$60 per barrel and an average daily oil production of 1.031 million barrels per day.