How would you rate the performance of Petroleum Development Oman (PDO) in 2014 compared to last year?
We are very proud of our performance in a number of key areas. Firstly, safety, where we recorded the lowest lost time incident frequency (LTIF) and total recordable case frequency (TRCF) on record. In process safety management and asset integrity, several assets reached calculative status, which is a high international standard of integrity assurance. On the production side, we also set new (combined oil and gas) records. We have continued to build oil production and to meet the increasing demand for gas. On the exploration front, notwithstanding more than four decades of drilling, we continue to have high success rates. The portfolio is, of course, getting more difficult; for example, we are getting into tighter, deeper gas developments, but we are highly encouraged by extended test results. On the well reservoir facilities management (WRFM) front, we continue to set the benchmark and have received much global recognition. Ultimately, it is all about the performance of the fields. You have to get the basics right and also successfully implement enhanced oil recovery (EOR) technologies. We have fields that are producing more today than they were 30 years ago, and there are very few examples of that around the world. Thanks to considerable well intervention and restoration work, we now have very low decline rates in fields that previously were subject to high decline rates. Project delivery is also getting stronger, while the exponential growth and challenges of our business, including water production, the number of wells, and power requirements, means that driving lean and continuous improvement are a must for longer-term success and to manage the transition from primary to secondary to tertiary production. All in all, it was a good year, but there is no complacency and our focus remains on improving all parts of our business, including how we interact and support our contractor community.
Can you elaborate on the importance of technology and innovation as a key driver for your business?
We operate in an increasingly complex environment that needs to rely on more efficient energy management and more advanced and efficient subsurface displacement mechanisms. We are reviewing, testing, piloting, and prototyping some 70 different technologies at any one time. Some of them work, some of them don't, while some of them go into full-scale implementation—it is a never-ending process. We work with many different companies to help us deal with some of the challenges we face. One such challenge is water management. PDO produces considerable volumes of water of different salinities. The Nimr reed beds project is a fantastic success, enabling us to handle more than 700,000 barrels of produced water, with a 98% reduction in energy use. We can't use that solution 100 kilometers south or north of Nimr because water salinities, and other contaminants, are very different.
How is PDO managing the increasing demand for gas, and why is the resource a priority for the country?
Gas remains a key and strategic fuel for today and the foreseeable future. It is cleaner, more reliable, and more efficient than oil-fueled energy. Power and desalination plants, energy exports, and domestic industrial expansion are all largely driven by fuel-gas. On the supply side, we are trying to explore, connect, deliver, and compress as much gas as possible in a cost-effective way. On the demand side, we are not just a large energy supplier, we are also a significant energy user, for example for thermal EOR processes that are fuel-gas intensive. As a result, we place huge emphasis on energy optimization, indeed as much as we do on energy exploration.