The Business Year

Raoul Restucci

OMAN - Energy & Mining

Enhanced Edge

Managing Director, Petroleum Development Oman (PDO)


Raoul Restucci was appointed Managing Director of PDO in 2010. Prior to this he was Executive Vice-President of Upstream for Shell in the Middle East & North Africa and was a member of Shell’s Upstream Leadership Team. He first joined Shell in 1980, following his graduation from Nottingham University with a degree in Mining Engineering.

"Renewables are a viable opportunity, obviously starting on a smaller but sustainable scale."

How has Petroleum Development Oman (PDO) evolved in recent years?

PDO has a distinguished history. The first cargo was in May 1967 from the early developments in the northern fields, which produced generally light oil. Work gradually shifted to the southern fields, moving toward infill drilling, horizontal drilling, 3D seismic work, and water floods, and more recently with enhanced oil recovery (EOR), which is an area through which PDO differentiates itself from all other companies. Our geology is complex; our fields are more mature and they tend to be smaller than our neighbors. Pressure support is more limited and oil viscosities tend to be higher, with an increasing level of sour gas production. We have had to move into a significant program of EOR technologies. We are the only company in the world that has thermal, miscible, and polymer chemical injection recovery mechanisms within the same concession, all of which are in full-scale implementation.

Which EOR technologies are the most important for PDO today?

Polymer injection is effectively the most embedded and advanced field application; however, miscible gas is very significant and thermal processes are expanding every day. The key point is that at the moment they represent 3% or 4% of our total production, so they are relatively small. By 2020-2021, however, more than one-quarter of our production will be linked to these recovery mechanisms. There will be an exponential increase in the contributions made by EOR technologies in the future.

“Renewables are a viable opportunity, obviously starting on a smaller but sustainable scale.”

How significant is the research PDO does into EOR?

I am a strong believer that research is about effective implementation more than just having it on the shelf. PDO is particularly strong in technology testing and deployment, with considerable experience in identifying and assessing new tools and processes and with proficient implementation practices. We have very strong technology relationships with a number of entities, with Shell as a significant partner and stakeholder. We also have partnerships with Sultan Qaboos University, alongside a number of industry projects with key service and technology providers across the world. At any one time, we have in excess of 70 different technologies being tested, simulated, modeled, or implemented in the field. In some areas, we progress to full-scale adoption, while in other areas we are in the early front-end assessment and development stages.

What opportunities exist to market PDO’s expertise elsewhere in the world?

I think EOR technologies developed in Oman will be increasingly exported to countries that are looking to progress through similar development challenges, across the full spectrum of exploration seismic through to development applications. Oman is recognized as a center of best practice in oil and gas exploitation. Increasingly, this is focused on the well and reservoir/facility management of our operations, our water management and reservoir imaging technologies, our artificial lift experience, and so much more. This knowledge and operational experience is showcased and exported to a number of countries, principally in the GCC, but also beyond and in the same way as PDO seeks and pursues best practice from other countries. That is one of the strengths of working with our international partners such as Shell, Total, and Partex, where you are networking, capturing, and sharing best practice wherever that may be.

What chemical and geographic complications do you face drilling in Oman?

In general, the conditions are deeper, tougher, tighter, hotter, and high-pressure environments with additional challenges such as hydrogen sulfide, carbon dioxide, and so forth. As you progress through those more complex challenges, you have to step up the level of safety assurances, and associated mitigation and risk management measures. The challenge doesn’t mean a higher risk. You have to deal with the challenges with appropriate safety measures and mitigation programs, lowering risks to the lowest possible level. Development costs are rising, but the economics of finding, developing, and operating these fields are competitive and very robust.

What cost control measures does PDO implement?

We have several strategic cost initiatives focused on activity-based cost leadership and cost management to optimize scale and efficiency. One of the most significant enablers is our Lean program. We are driving Lean increasingly across all our projects. In each area, we are developing a practice to eliminate waste, drive efficiency, optimize workflows, and employ standard operating procedures. In 2012, we received a number of awards for key Lean project accomplishments. Enablers include our high technology collaborative work environments, involving televised conference calls, and proficient sharing of common data between the head office and field operations, along with the intensive use of visual management. This allows people to understand the contribution they are making to the overall PDO targets. Waste is disrespectful to people, and as you pervasively address this, you dramatically reduce costs and more importantly increase productivity and value creation.

What recent discoveries has PDO made?

The most significant discovery made in 2012 was the Mabrouk deep-gas field, the largest discovery within our concession in a decade, with estimates of 3 trillion cubic feet (tcf). We were successful in the appraisal and extension of the Harmal field, with additional gas in place in excess of 1 tcf. In the past few years, we have replaced production by as much as we have extracted. Notwithstanding several decades of exploration and the maturity of the portfolio, we are proud to have secured a reserve-to-production ratio of one over several years.

How important will the Duqm project be for PDO?

The size of the concession that we manage is basically the size of England, so the optimization and enhancement of ports and logistics will help us dramatically in reducing costs and turnaround times, as well as in potentially distributing different grades of oil. The southern fields tend to be heavier, the northern fields are lighter, and Duqm may provide the opportunity of segregating these grades in the long term.

How do you see the balance between oil and gas production changing in PDO?

Gas is taking an increasing prominence locally, regionally, and globally. At the moment, gas is taking increasing prominence and is recognized as the fuel of today and the future, so you will see an increasing focus on exploration and appraisal, particularly of tight gas accumulations and steadily increasing consumption for several years. In the longer term, we envisage increasing shifts toward renewable energy sources. Oman is obviously endowed with an incredible solar potential, and what is very exciting is the progress with the Amal steam solar project we commissioned in December 2012 in proving how viable and competitive renewables can be. It is by far much more efficient and cost effective than most projects I have seen around the world, adopting a very simple concept and smart engineering using a glasshouse to protect solar panels.

How do you regard the future of renewable energy technologies in Oman?

Renewables are a viable opportunity, obviously starting on a smaller but sustainable scale. There is the opportunity to address the consumption side through reducing the amount of gas per megawatt required, and the amount of gas per barrel you lift. Renewably sourced steam can, for example, improve oil and gas recovery and enhance turbine power delivery.

How does PDO work toward reducing energy consumption in the Sultanate?

The question of energy utilization and consumption is crucial. The Nimr Reed Beds, for example, dramatically reduce the energy requirement for water treatment, while the optimization of combined-cycle power stations utilizing waste heat recovery increases efficiency in steam for EOR thermal projects. Our solar steam EOR project in the Amal West field is another example. Over the last several years, our reduction in fuel consumption to operate our fields has equaled our exploration and improved field recovery efforts, and energy consumption management remains a key priority at PDO.

© The Business Year – June 2013



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