Wednesday, Aug 12, 2009
(Adds oil trading prices, non-OPEC details.)
By Tahani Karrar
Of ZAWYA DOW JONES
DUBAI (Zawya Dow Jones)--Oman, the largest Persian Gulf oil producer outside OPEC, pumped 6.6% more crude in the first six months compared with a year earlier as Royal Dutch Shell PLC's (RDSA.LN) local venture boosted output.
Oil production averaged 792,700 barrels a day up to June, against an average of 743,400 barrels a day during the same period last year, figures from Oman's Ministry of National Economy show.
The increase is a sign that Petroleum Development Oman (PDO), a joint-venture with Shell that produces two-thirds of the sultanate's hydrocarbon liquids, is succeeding in reversing a decline in Oman's output from its aging wells.
"The increase was partly due to the bringing on stream of the condensate rich Kauther gas field and heavy investment in our existing oilfields to minimize their natural production decline," a spokesperson for Petroleum Development Oman told Zawya Dow Jones in a phone interview from Mina Al Fahal, near Muscat.
Oman needs to boost oil output in order to plug a hole in its revenues from the decline in average oil prices since last year. The average price of the Omani oil fell by 50.5% during the first half to $45.72 a barrel, against $92.39 a year earlier, the data shows.
Regional investment bank EFG-Hermes warned this week that Oman along with Bahrain will be the only members of the Gulf Cooperation Council to run a budget deficit this year, partly due to the fall in oil prices.
PDO, which is 34%-owned by Shell, has increased investment since 2002 into projects that pump water into aging oil wells to boost underground pressure and extract hard to get crude.
"In 2008 we spent more than $3 billion on capital expenditures including water flooding," the PDO official said. ASIAN DEMAND
Total production of crude oil and condensates, a high-quality oil produced with gas, hit 143.5 million barrels by the end of June, against 135.3 million barrels a year earlier, or a 6% rise.
Oman exported a total 117.7 million barrels in the first half, with Asia its biggest market. China topped the list of countries importing Omani oil buying 40.5 million barrels during the first six months. Other major importers include Thailand, South Korea and Japan, the data shows.
The sultanate holds observer status at the Organization of Petroleum Exporting Countries but isn't bound by the group's production quotas and can't vote at its output setting meetings.
Earlier Wednesday the International Energy Agency modestly revised its forecast for world oil demand up 190,000 barrels to 83.94 million barrels a day, although still 2.7% below 2008 levels, on improved Asian economic activity. The agency said non-OPEC countries like Russia are pumping more crude that would mostly offset the added rise in consumption.
At 1245 GMT, the front-month September Brent contract on London's ICE futures exchange was down 33 cents at $72.13 a barrel. The front-month September light, sweet, crude contract on the New York Mercantile Exchange was trading 8 cents lower at $69.37 a barrel.
-By Tahani Karrar, Dow Jones Newswires, +9714 364 4965 Tahani.Karrar@dowjones.com
Copyright (c) 2009 Dow Jones & Company, Inc.
(END) Dow Jones Newswires