PDO to diversify into carbon capture, blue hydrogen in Oman

MUSCAT, MAY 6

Petroleum Development Oman (PDO), the biggest oil and gas producer of the Sultanate of Oman, has announced a landmark foray into Carbon Capture, Utilisation and Storage (CCUS) – an emerging multibillion dollar global industry billed as critical to achieving a zero carbon economy for Oman and the wider world.

At the same time, the majority state-owned energy company also plans to diversify into the production of blue hydrogen, a commercially valuable low-carbon commodity closely associated with the deployment of CCUS technologies. Blue hydrogen is also seen as a transition fuel before zero-carbon green hydrogen becomes available starting from 2030.

According to PDO Managing Director Steve Phimister (pictured), the twin initiatives will help unlock new revenue streams for the company. “PDO has a strategy pillar to diversify its revenue stream as a part of diversifying the Omani economy per Vision 2040. By leveraging our existing skills and asset base, the aim is to move first and foremost into carbon capture, utilisation and storage,” Phimister said.

“Within this field, the scope is to be a user of CO2 – principally for EOR (enhanced oil recovery) and EGR (enhanced gas recovery) purposes – and in May 2022 we signed an agreement with Shell Development Oman to jointly study and collaborate on CCUS for blue hydrogen production on Block 10 given the natural adjacency between CCUS and blue hydrogen,” the Managing Director stated in an interview featured in The Energy Year, a London-based energy-centric news portal.

The announcement is set to further buoy a nascent bid, led largely by a handful of climate-tech startups, to kindle the growth of a CCUS industry in Oman. Through Direct Air Capture (DAC), carbon mineralization and other such initiatives, the rudiments of a future CCUS industry are being laid. By scaling these technologies to capture, for example, CO2 emissions from large energy-intensive industries, CCUS advocates see the potential for either the utilization of CO2 for various oilfield or industrial applications, or its sequestration underground.

For PDO, however, the focus is currently on the ‘utilisation’ part of CCUS. “That means building up the infrastructure and the capabilities to use that CO2, mainly for EOR practices,” the Managing Director explained in the interview. “Our strategy then goes on to look at the sequestration aspect – the process of capturing and storing atmospheric carbon dioxide – as we have a number of sites in which we can provide sequestration not only for our own emissions but also in the service of third parties in their efforts to decarbonise their businesses. These include aquifer-based sites or depleted reservoirs.”

Significantly, PDO will also support the carbon capture and decarbonisation goals of the industrial, transport, housing and other economic sectors that are emitters of planet-warming CO2, he said.

“In short, CCUS will become pivotal, with PDO strongly positioned to provide additional services to the country in the segment while playing a major role in blue hydrogen developments too,” Phimister added.