The Iraqi company which drilled the first well in Oman (Fahud-1) couldnt have thought that they missed a huge oil reservoir by only a few meters. Their exploration well came dry and the dream for easy dollars in the 1940's made Sayyid Said bin Tamiurs hope for a better country fade away. The iraqi company decided to leave, not knowing they are leaving billions of easy dollars behind. Shell, on the other hand, didnt want an easy escape for thier dreams and Oman's hopes for a better country in which at that time death was rather merciful than living. They got the exploration expertise into the country and formed a joint venture with the government of Oman (PDO) which started perfectly shipping thier first oil produced in 1967 from Mina Alfahal.

The easy dollars have faced a lot of obstacles,be it political as the rebillion in Dhofar region in the recent age, or geological as the million years of tectonic move of continents which had a geological impact making Oman's subsurface a nightmare for any company to produce it's oil millions years later.

As mentioned, The geological features of Oman are very complicated, making easy dollars not as easy and cheap as one thinks, yet it's very fair to say that era of easy dollar has almost finished. Many years of oil production from 1967 to 2006, the country's easy oil is already produced.fields got matured and the reserves are not anymore as significant as they were. Some international reports expect Oman to only produce oil for 20 to 30 years to come, after which oil and gas production will be very limited. Although the oil prices are expected to rise, compensating the declining production with time, however, even if the price of a barrel gets to 1000000 dollars, Oman may struggle to produce that single barrel when there's no reserve to produce.

Are we ready, have we thought very well and planned thoroughly for what's coming ahead?





:flag: The only reason I'm not posting this in the Buisness Forum is because it's a concern for every single Omani, you, me and everyone else.

welcome back !

old members are coming to sabla , nice

no wonder oman is moving towards tourism/hospitality and business center - sectors instead of the normal middle eastern oil sector

Faisal a nice article...before I comment may you provide the source?

Something mentioned about this here !



history (http://www.pdo.co.om/PDO/AboutPdo/History/)

Faisal You are right about a time we need to think well OIL and GAs wont last forever thus its a big income for our country, hardly if things goes as bad as its now our Oli will only survive for not more than 20 to 25yrs, we dont have Big Reserve... and yet we are the biggest spender

Are we ready, have we thought very well and planned thoroughly for what's coming ahead?




.

“His Majesty said Many have advised us to expand in investing the reserve fund but we didn’t want to take any risk and we preferred to focus on well studied investments that are free from risks. On the future resources, I could say Oman boasts a great many heavy crudes with big reserves which were not feasible according to the previous oil prices, but according to the current oil prices, which will not come down due to the ongoing growth in the world, production of such oils has become feasible and this heavy crude is demanded by the international market.

His Majesty noted We also have reserves of gas which is exported according to long-term pacts and we have other resources such as gypsum, chrome ore and cement in addition to agriculture and fisheries and the increased doses of investment and tourism. I think we progress steadily and reliably.”

In an interview with Ahmed al Jarallah, the Editor-in-Chief of Al Siyassa daily of Kuwait, published on 11/02/06

Oman needs to depend on things other than oil and gas
i've noticed they're focussing on tourism now which is a good move
thanx for sharring Faisal :)

Thug4life, well I wrote the article, and thats the source.

Try to check.
PDO History (http://www.pdo.co.om/PDO/AboutPdo/History/)

I can talk in more detailed but PDO policy doesn’t allow me to post any thing without going back to our HR department. :)

The first company was BP/Shell, and shell was some thing called "slippery partner" and they were dominating the area including Iraq, that why they call it an Iraqi company.
After PB sad failure, Shell Geologists and other engineers were convinced that there are many good assets in Oman. And they were lucky enough to find the oil in the other side of the mountain

“His Majesty said Many have advised us to expand in investing the reserve fund but we didn’t want to take any risk and we preferred to focus on well studied investments that are free from risks. On the future resources, I could say Oman boasts a great many heavy crudes with big reserves which were not feasible according to the previous oil prices, but according to the current oil prices, which will not come down due to the ongoing growth in the world, production of such oils has become feasible and this heavy crude is demanded by the international market.

His Majesty noted We also have reserves of gas which is exported according to long-term pacts and we have other resources such as gypsum, chrome ore and cement in addition to agriculture and fisheries and the increased doses of investment and tourism. I think we progress steadily and reliably.”

In an interview with Ahmed al Jarallah, the Editor-in-Chief of Al Siyassa daily of Kuwait, published on 11/02/06

I have some serious concerns in calling any investment a risk free investment. As a matter of fact, I've been involved in studies and projects in which tremendous amount of money and time was invested in planning, appraising and studying, yet we still applied a very strict risk factor as high as 50%. The studies for these projects took in average 5 years.


A great many heavy reserves? the words great and many are very subjective. What could that mean? 1 millions of barrels? 10 millions? 100 millions? Not conclusive enough. Yet Oman already started producing the heavy oil from some fields in the south and that's also included in the expectation for 20 or 30 years of production.

Regarding LNG or LPG, our current reserves are not very promising, not anything to replace our current pace of production of Oil. These are also not as easily produced and marketed. For you to even think of developing a gas field, you have to have a buyer readily available and committed to buy the gas. Transportation of gas is very expensive. Qatar did a study and it appeared that connecting a pipeline all the way from Qatar to India is cheaper than transporting it with LNG ships. Now that's just an example for you to imagine how expensive it is to build and transport using ships.


I must say I'm really worried about the future of Oman.