What is PDO?

RAY PETERSEN -

Petroleum Development Oman is referred to locally as PDO, and is the major producer of crude oil and natural gas in the Sultanate of Oman, and is also one of the top twenty oil production companies in the world. The company is a joint venture between the Government of Oman, which is the major shareholder, the international giant Shell Oil, French company Total, and the Partex Oil and Gas Corporation.

The company was first established way back in 1925, and has always been a pioneer in oil exploration and production, though not always successful, and in fact the very first geological surveys in 1925 concluded that there was no oil to be found.

Then, in 1954 exploration started afresh in the Jebel Fahud area. The contractors faced huge issues of supply, being a long way from adequate service and support bases, and this created logistical challenges, though these proved manageable in a supply context.

A greater issue was the tribal conflicts over the possibility of wealthy incomes. These resulted in battles over the actual exploration sites and also ambushing of supply convoys. In the end, after drilling and finding no oil, it became too much for most of the explorers, and only Shell Oil remained committed to oil exploration in Oman.

The first definitive discovery of oil in Oman was at Yibal in 1962, and the first significant find, of an oilfield measuring 10kms by 6kms, was at Natih the following year.

To give you an indication of how large that one oilfield is, today, fifty years later, less than 20% of the available oil has been extracted from the Natih wells. Ironically, in the same year, a significant oil discovery was also made at Jebel Fahud, only a few hundred metres from where the dry wells were drilled in 1954.

These discoveries created another challenge for PDO. How to get the oil from the middle of the desert region, to the coast, for export? The answer was to build a huge 270 kilometre pipeline from the interior to a tank farm, collection and processing area at Mina Al Fahal, on the coast at Muscat at a cost of $70 million. Then to build a refining, exporting and research facility to handle the produced crude oil.

A feature of this venture is the provision of single-point mooring buoys for the giant tankers that transport oil all over the globe.

Anchored to the seabed, about 2000 meters from the coast are huge flexible pipes, enabling oil to be gravity fed from the onshore holding tanks, directly to the ships.

As the loading is complete, the pipe is simply closed until another ship is moored for loading. It is a simple and effective method and is capable of transferring more than 300 million barrels each year. The very first export took place in 1967, and was of 543,000 barrels of oil at a price of $1.42 per barrel, with a total value of over $770,000. Oil prices have risen so much since then, that the same shipment today would have a value of over $50 million.

PDO has always been an innovator in research, and since 1986 have been the world leaders in a process called horizontal drilling, which enables higher and more efficient recovery rates of oil, sometimes as much as three times more efficient as the older direct drilling methods.

Since 2002 they have also been pro-active in pioneering new technologies in recovery methods and currently is dedicated to the issue of recovering ‘sour gas’, which contains unsafe concentrations of hydrogen sulphides. Success in this area would be their most significant achievement yet.

Today, PDO can boast direct employment for 9000, of which 7000 are Omanis and indirect employment, via contractors, for another 4000 plus. Add in nearly $4billion in contracts to Omani companies, and you have significant visible community engagement.

The Oman Government is represented on the Board of Directors by the current Minister of Oil and Gas, Chairman H E Dr Mohammed bin Hamad bin Saif Al Ruhmy, two Under-Secretaries, and three other high ranking Ministry officials, all of the partners are represented, the Managing Director and Finance Secretary.

Under current Executive Managing Director, Raoul Restucci, PDO has embraced and further developed its social investment program, implementing programs where Omanis can develop job skills, and especially in the area of disadvantaged community groups such as the disabled.

It has also become a national tradition for PDO to announce significant ‘gifts to the nation,’ every five years, with examples the Traffic Safety Institute, EcOman, the Oil and Gas Exhibition Centre, and a Planetarium.

These are all aimed at developing themes such as education and training, the environment, healthcare, social and cultural needs, tourist initiatives, and enhanced community support in the concession (drilling) areas.

PDO is more than numbers, oil, figures, barrels, or even people, but is the beating heart of Oman’s commercial and financial well-being, it stands as a magnificent monument to the adventure and awareness of Sultan Qaboos bin Said.

The power behind the throne maybe? No, there is much more to it than that. It is a very well-constructed industrial, corporate and social entity, capable of functioning in adversity, through diversity, initiative and social awareness. A key element of the Sultanate’s renaissance.