Omani national oil company moves to slash flared gas and makes progress on its solar EOR scheme
Petroleum Development Oman (PDO) showed movement on two fronts in late September and early October on plans aligning the company’s own operational requirements with national green imperatives.
An initiative was launched to potential suppliers designed to conserve a portion of the country’s scarce gas reserves currently squandered through environmentally egregious flaring – with PDO also among the largest consumers of the resource for use in oil production.
Meanwhile, a milestone was reached on a ground-breaking project at a southern field to replace such gas with solar power for the generation of steam required for a thermal enhanced oil recovery (EOR) project.
PDO, the sultanate’s largest oil and gas producer, was due to receive responses in late September to a ‘request for information’ from potential suppliers of technologies for a programme to reduce the volumes of gas being flared from operations across the company’s Block 6 concession. The asset covers most of the sultanate’s onshore territory and yielded 600,000 bpd of crude last year.
According to the announcement, around 60 flares are in operation, grouped into three categories for the purposes of the tender – these being associated gas flares linked to oil operations in the North Oman and South Oman production zones, and non-associated flares arising from dedicated gas-producing operations across the acreage. PDO professed to be seeking “the best technically and economically feasible and proven solutions to reduce/mitigate [the company’s] flaring,” with suppliers invited to submit proposals for either all or part of the work. The company claimed to have slashed flaring by 38% in 2016 to 12.86 tonnes per 1,000 tonnes of production.
Nonetheless, flaring absorbed just over 10% of the total gas consumed by the firm’s operations – at an average of 2.7 mcm per day out of 25.1 mcm per day – while the country as a whole faces a growing shortage of the resource to meet spiralling power generation and industrial needs.
PDO, which is majority-owned by the government alongside Royal Dutch Shell, has signed up to the World Bank Zero Gas Flaring Initiative calling for the practice to be eliminated entirely by 2030.
Efforts by the sultanate’s flagship company to optimise the use of scarce natural resources were similarly evident in a tender floated in early September seeking technology providers for a wastewater reuse scheme at the Qarn Alam steam-injection project.
PDO has also been working from the opposite end of the production process to reduce the quantity of gas consumed in crude recovery, with the region’s first solar-based thermal EOR project – dubbed Miraah – in operation at the Awal West field in the south of Block 6.
The developer, California-based specialist Glasspoint Solar, provided an update on the scheme in early October following completion of the first of the 36 ‘greenhouses’ to be installed under the ‘enclosed trough’ system being used.
The concentrated solar power plant will replace gas in the generation of the requisite steam – and at full capacity of 1,021 MW is designed to generate 6,000 tonnes per day of steam.
Glasspoint reported that costs had been reduced by 55% thus far during the scaling-up of the project from a 7-MW pilot at the same field – commissioned in 2013 – through the use of cheaper and more efficient equipment and materials. Construction operations had also now adapted to the harsh climate and remote location, the firm said. When the deal was signed between the two companies in July 2015 to proceed with the commercial-scale project, total costs were estimated at US$600 million and annual gas savings on completion were put at roughly 5.6 trillion Btu.
Around 25% of the gas consumed in the sultanate is absorbed in oil production through PDO’s widespread use of resource-intensive EOR technologies to maintain crude production levels. By 2025, 25% of the company’s total output is expected to be extracted using such methods.
PDO managing director Raoul Restucci cited the landmark Miraah project on October 1 when declaring the firm’s plans to become a “fully-fledged energy company” with interests in renewables as well as in traditional oil and gas – mirroring the recently declared strategies of NOCs elsewhere in the GCC.
“There are several opportunities in Oman relating to these [renewables] sectors [and] we need to start capitalising on the opportunities presented by these sectors and create jobs for locals,” he told reporters. Restucci stated a target of generating 50,000 jobs outside the oil and gas sector over the next three years.
Oman has been slower even than its Gulf peers in developing renewable energy, while PDO’s position to spearhead national efforts to do so is more complicated than that of Saudi Aramco or Abu Dhabi National Oil Co. (ADNOC) by dint of the minimal current activity outside upstream oil, part-foreign ownership by Shell, and a generally less economically dominant role than that of its GCC counterparts.