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PDO earmarks a capital budget of $5.498 billion for 2020

Petroleum Development Oman (PDO), the country’s biggest oil and gas producer, has set a capital budget of $5.498 billion for 2020. This was announced in the energy firm’s Sustainability Report 2019, along with their goals of $5.3 billion in capital expenditure (CAPEX) and $2 billion in operating expenditure (OPEX).

The company has presently embarked on one of their most elaborate cost reduction exercises as a response to the disputes let loose by the steep in oil price and the resulting economic stoppage. Their new method is designed to help PDO achieve a 30 per cent cut in their overall activities and operational costs.

In their report, PDO announced that there were facing the ‘perfect storm’ – alluding to the macro-economic demand and the COVID-19 pandemic. This acted as a catalyst for the collapse in oil prices, mass unemployment and exponential rise in debt.

The Energy firm has since, established numerous teams based on the Near Term Sustainability Programme (NTSP). NTSP is designed to address a change in structural cost reductions and productivity improvements on a far greater scale compared to PDO’ history. With NTSP, PDO foresees a 30 percent unit cost reduction in every single activity, from processing to deliverability across the Sultanate. Currently, PDO’s Cost Optimisation Reviews (CORs) provides an engaging platform for contractors to find sustainable and efficient methods of working.  

Dr. Mohammed bin Hamad al Rumhy, Minister of Oil and Gas and Chairman of the Board of Directors of PDO commented on the challenges faced by the energy sector and the economy, stating that with the pandemic, oil prices surges, production halts, financial strains, climate concerns, disrupted technology support and geopolitical instability, has created a harsh environment revealing the vulnerable nature of the firms.

Dr. al Rumhy proceeded to emphasise  the importance of the Energy sector to the economy, considering that the Sultanate views the sector a key engine for revenue. The Energy sector has managed to adapt and continue to bring out results even during these pressing times.

Despite the mounting cash-constrained scene and the persistent oil price volatility, PDO has succeeded in delivering its highest production of Hydrocarbon in the past two decades. Managing Director Raoul Restucci notes that this is the result of a combined daily oil, gas and condensate output of 1.210 million barrels of oil equivalent per day.

Mr. Restucci further explains the success – the average oil production since 2015 being 616,380 bpd, saw an increase of 6,210 bpd in 2018. This grew to their average in 2019 being 62.2 million cubic metres per day. With this, PDO was able to play the role of swing producer and meet the customer demand. Aside from this, PDO’s condensate production was 77,950 bpd, which was considerably 20 per cent higher than their 2018 average. In their fourth quarter, their number rose to 94,000 bpd which was the result of the start of the Rabab Harweel Integrated Project (RHIP). Mr. Restucci denotes this as the largest in the Sultanate.

In 2019, PDO also achieved other feats. They reinforced their hydrocarbon reserves with the booking of 136 million barrels of oil and 1.1 trillion cubic feet (Tcf) of non-associated gas as Commercial Contingent Resource volume.  PDO also achieved their lowest unit finding cost for oil - $1 per barrel.

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4 Crucial business skills you need to survive the post-COVID 19 world

Industry experts have identified that the due course of the pandemic has brought forth economic downfall, leading to pay cuts and some even losing their job. Countries have put into work financial packages to cushion the damage cause by the extended lockdown period. There are many setbacks in the normal functioning of industries the likes of hospitality, aviation and MSME. While the world outside is still at a standstill, virtual platforms can help in honing job skills that could help you survive in the professional world after the pandemic is over.

 1.       Technological skills

Being tech-savvy can boost an employee’s prospect in the post-coronavirus world. With the huge shift of employees working from home, online meetings and social media tools to connect professionally has become indispensable. Experts note that the future will be rise of artificial intelligence, Internet controlled operations and use of robotics. People that develop an aptitude to learning new technologies and develop their skills, adapting to using emerging tools will have an advantage over others in the workplace.

 2.       Leadership skills

People with strong leadership qualities often emerge successful during the hour of crisis. With many tech giants asking their employees to work from home till the end of 2020, managers and team leads are introduced to a new setting where their leaderships skills are put in the wringer. People with strong leadership skills can manage team distantly and inspire them to bring out the best. Now is the best time to hone your leadership qualities.

 3.       Emotional intelligence

A rather underrated skill, emotional intelligence is a quality that can often aid a person in being receptive to other's emotions while also helping in expressing or controlling one’s emotions well. All leaders possess this skill – they are empaths and can easily assess the mental and emotional health of their team members. During these turbulent times, emotions are high and employees with higher emotional intelligence have a better chance of survival.

 4.       Adaptability

Social distancing, lockdown and working remote has brought in changes to our routine and will most definitely bring in more changes once the pandemic simmers down. This new shift of working remote at present has introduced Industries with the notion of continuing to work remote even after the pandemic ends. People with skills to adapt quickly to changes and perfectly capable of working on their own, remote, would be of great value to their companies.

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First Quarter in the Oil & Gas Industry - Coronavirus, Oil influx and Global Supply Chains

As nations across the globe prepare to face the possible health emergency - COVID-19, world leaders are dawning on the realisation that this erratic epidemic might be tedious to control. With effective quarantine station ready and concerns for health rapidly increasing, the economic environment is also receiving damage, especially the western countries. Milan, the financial hub of Italy was almost placed on lockdown due to hints of coronavirus spreading in northern Italy. Many companies have resorted to work-from-home as a safe alternative. These tales across the world further strengthen the claim and fear over the vicious virus.

Apart from fear of health and wellbeing of individuals, the coronavirus is also quickly eradicating the economic health across the globe. One telling factor, is the virus’s effect in the falling prices in global Oil and Gas markets, especially, China’s toll on the O&G Sector. Previously, the rising supplies and mild winter weather plummeted the price of liquefied natural gas (LNG), but present cases reveal the price dropping to near bottom levels due to a smaller number of U.S. producers who are willing to pay for the surplus domestic natural gas. This Monday, once again, saw a dwindling drop in Oil prices as the disruption of trade and shipping was met by the virus.

Close to eight percent of the world’s goods are transported via ships, but the recent outbreak has significantly damaged the numbers. The February loading of large crude carriers in the Persian plunged from thirty tankers to single digit values. Regions across the world are also witnessing a reduce in numbers and stats as more and more nations choose to place social wellbeing before economic growth.

The year began with reports and statistics from the Organization of Petroleum Exporting Countries (OPEC), pointing towards a good increase in demand – Marine fuel harbouring a global demand of 4.2 million b/d, Aviation oil for 6.6 million b/d and Total transportation oil use averaging around 58 million b/d. Evaluating the current situation, analysts are quoting a projected loss of 135,000 b/d of jet fuel demand in Asia. In summary, the onset of coronavirus and its effect on the oil market is most likely gaining momentum.

With regards to the COVID-19, the reserve of substances and equipment and the precautionary measures taken by companies, Dr Salman bin Mohammed al Shedi, Director-General of Petroleum Investments at the Ministry of Oil and Gas announced that the operations carried out by the oil and gas sector companies has not been affected by the new coronavirus (2019-nCoV) outbreak. Speaking about the issue at the at a press conference announcing the details of the Oman Oil and Gas Exhibition and Conference (OPES2020), Al Shedi agreed that the virus outbreak did, however, have a massive impact on the logistics operations and on the supply of production lines and general operations around the world.

At the opening of the International Gas Research Conference (IGRC) 2020, the Sultanate expressed solidarity with countries around the world grappling with the deadly effects of the coronavirus epidemic. Dr Mohammed bin Hamad al Rumhy, Oil and Gas Minister voiced the nation’s understanding and empathy for countries battered by dwindling economy, travel restrictions and other preventive measures acted upon in the wake of the virus. During his speech, al Rumhy announced that Oman stands by other countries facing similar crisis and is ready to support countries as an energy supplier. Harib Al Kitani, CEO of Oman LNG focused on that aspect of the coronavirus, and its impact on business.

If coronavirus prevails in rippling an after-effect on economic supply chains of more crucial industries, expect to see an increase of such deteriorating trends. Firms operating in the Sultanate have already taken precautionary steps towards handling the current situation.

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Lux Research: Energy storage market to grow to $545bn by 2035

According to recent reports published by Lux Research, the annual revenue for total energy storage market is expected to shoot up to $546 billion by 2035, according to a report released by Lux Research, a global research and advisory firm.

Lux Research, a global research and advisory firm, in its report titled - Global Energy Storage Market 2019 cited the three main provider of energy storage: Mobility Applications, Electronic Devices and Stationary Storage.

Over the next decade or more, these three drivers are said to attain an annual combined deployment level of 3,046 GWh with mobility application bringing in the bigger share. The current deployment level is 164 GWh.

Chloe Holzinger, one of Lux’s lead authors, commented that commercialization of vital innovative technologies, the likes of solid-state batteries and flow batteries, is sure to usher a hike in annual revenue and deployment capacity in the energy storage industry. The industry is subsequently gearing for the steady climb.

Electric mobility applications, like the light-duty passenger vehicles are expected to be the primary long-term drivers of energy storage annual revenue and demand. By 2035, the light-duty passenger vehicles is expected to hold a total market share of 74 per cent by annual revenue and 91 percent by annual deployed GWh.

For energy storage market, changes are going to be imminent and visible in the next couple of year, especially in revenue growth and deployment. With over 2035 projections, light-duty vehicles progress to be the largest market in the section with a predicted increase of $24 billion revenue by the end of 2022

Following light-duty vehicles, medium and heavy-duty vehicle are predicted for a thriving growth of over $600 million a year in 2019 to an increased $3.6 billion per year by 2022. Medium and heavy-duty vehicles are also driving home with a highest Combined Annual Growth Rate (CAGR) of 80 per cent. Residential storage is predicted to reach $8 billion revenue and CAGR of 76 per cent in the next three years. This is followed by personal mobility at an expected $4.6 billion revenue increase and CAGR of $49 per cent.

The report also predicts Mobility applications facing a steady flow in long-term growth and demand through to 2035. Personal mobility devices, however, are expected to increase to a revenue of $43.7 billion. By 2035, Stationary storage is expected to touch $111.8 billion in revenue by 2035, which is a huge leap from the significant increase of $9.1 billion revenue in 2019.

On the contrary, energy storage demand for electronic device applications is expected to remain consistently mediocre for the next 15 years, delivering a CAGR of only 1.9 per cent. This is due to an increase in population paving way for saturated demand in laptops, cell phones, and tablets.

The Lux report also identifies five major technologies that are shed light on growth in energy storage markets: battery recycling, electric aviation, flow batteries, thin-film batteries, and solid-state battery improvements.

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Top projects in Oman

The demand for Oil & Gas has picked up its pace in the recent years due to rising urbanization. Since the middle east countries are the prominent supply sources of Oil & Gas, efficient & economic projects are executed to compensate the rising fuel demand. Oman is one of the largest sources of Crude Oil & Natural gases and it is favourable destination for FDI.  Read on to know about few of the ongoing projects in Oman.

Duqm

Duqm refinery project is a joint venture between Oman Oil Company (OOC) and Kuwait Petroleum International (KPI).  It is the construction of Duqm oil refinery in Al-Wusta governorate on the east-central coast of Oman.

The project is expected to be completed on 2018. Upon completion, a production of 230,000 barrels of Crude Oil per day is expected. The primary products which are planned for production are Diesel, Jet fuel, Naphtha, LPG, Sulfur and Pet coke.

Three multi-billion-dollar packages were given on Engineering, procurement & Construction basis namely EPC- 1 EPC-2 & EPC-3

EPC Package 1 was awarded to a Joint Venture of Técnicas Reunidas S.A. and Daewoo Engineering & Construction Co for construction of Process Units.

EPC Package 2 was awarded to a Joint venture of Petrofac International Limited and Samsung Engineering Co. for construction of Utilities and Offsites.

EPC Package 3 was awarded to Saipem International for the production of storage tanks in Ras Markaz and for constructing an 80-km interconnecting pipeline to Duqm Refinery.

The process units will consist of a hydrocracker unit (HCU), a hydrogen production unit (HPU), a saturated gas plant (SGP), a diesel hydrotreating unit (DHT), an LPG treatment unit (LTU), a sulphur recovery unit (SRU), a delayed coking unit (DCU) a kerosene treatment unit (KTU). This state if art refinery will restore the local economy of the area, thereby contributing to the national GDP.

Khazzan natural gas project

Khazzan natural gas project is a world class project initiated by the Sultanate of Oman in the year 2014. The Khazzan field is one of the largest deposits of unconventional tight gas in the Middle East and is located at 350 kilometres south of Muscat.

The project is undertaken by two large operators namely BP Oman and state-owned Oman Oil Company (OOC). BP and OOC hold 60% and 40% of share respectively in the project. The project is expected to drill 300 wells over its lifetime. With construction workforce of up to 12,000, the project is undergoing development in full momentum by BP.

BP has completed more than 80% in Phase 1 of the project and is expected to deliver first gas near the end of 2017. Phase 1 of the project involves drilling of around 200 wells and construction of a two-train central processing facility. BP is utilizing its wealth of technical expertise in the project to unlock the vast reserves of tight gas.

The project provides business opportunities to various companies from various sectors. To name a few, Renaissance Services, a omani company won a contract to provide consolidated camp facilities management and another omani company called The Oman Construction Company (TOCO) won a contract for the installation of gas export pipeline from Khazzan central processing facility to the gas network at Saih Nihayda.

 Miraah Solar Project

Miraah Solar Project is the world’s largest solar plant in the world in terms of production. PDO along with Glasspoint initiated the project to provide an average of 6,000 tons of solar steam per day for oil production.

The facility covers 750 acres of desert with glasshouses to capture the solar rays and concentrate the energy to produce steam. The steam will be used in thermal enhanced oil recovery (EOR) to extract oil at the Amal oilfield. EOR is an efficient system which utilizes the steam to heat the heavy crude oil in order to improve flow properties which results in easier pumping of oil to the surface.

The project is under construction and the process in getting carried out in an economic way by utilizing Parabolic mirrors made of lightweight aluminium, resulting in material and cost savings.  Tubular glass shields are also used in the project so as to decrease heat losses from convection.

The project saves 5.6 trillion BTU of natural gas per year which is sufficient to provide residential electricity for more than 200,000 people. It also paves way to reduction of Carbon dioxide emission by 300,000 tons per year, which is equivalent to total CO2 discharged by 63,000 cars.

This Solar project also contributes for enhanced productivity and economic growth for the local community by creating new opportunities in supply chain development, manufacturing capability, and employment & training.

The scope of the project also extends to take over the diesel and higher carbon intensive power generation and oil burning in future thermal projects.

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