DEVELOPING NICELY

Oman 2016 | ENERGY | INTERVIEW

TBY talks to Raoul Restucci, Managing Director of Petroleum Development Oman (PDO), on the impact of declining oil prices on the company, efforts to support SMEs, and expectations for the coming year.

Raoul Restucci
BIOGRAPHY
Raoul Restucci started his career at Shell International in 1980, following his graduation from Nottingham University in the UK with a degree in Mining Engineering. After working in The Hague in production technology, he held several positions in Brunei in the areas of well-site operations, production engineering, and economics, before moving to Qatar Petroleum as head of Economics and Planning, followed by Production Technology, and later as Petroleum Engineering Manager at Al Furat Petroleum Company in Syria. Following this, he served Shell in several other senior positions; he later was appointed Executive Vice President for Middle East, Russia, and CIS, of Shell E&P Middle East based in Dubai, and was a member of PDO’s Board of Directors representing Shell. He assumed the role of Managing Director in October 2010 and in this position is responsible for the day-to-day management of the company in accordance with the program and within the budget approved by the Board of Directors.

Looking back over the past year, what have been some of the major successes for PDO, and how would you assess the impact of the low oil prices on the company?

Despite a challenging year, in which falling oil prices played an increasingly significant role, PDO was able to deliver impressive achievements across our operations. The average daily oil production for 2014 was 570,534 bpd—well above the long-term plateau target of 550,000 bpd. It was our highest oil production since 2006. The combined average production—oil, gas, and condensate—was also the third highest in our history at 1.231 million barrels of oil equivalent per day. Additionally, there was a significant 8% increase in stock tank oil initially in place from 61.9 billion barrels to 66.6 billion, thanks to outstanding exploration and reservoir management work. We created 4,300 job and training opportunities for Omanis with our contractors and awarded contracts worth $4.9 billion to local companies.

What are your views on OPEC's decision not to cut output, and how will it affect PDO and the Omani hydrocarbons sector?

We are determined to stay the course given the robustness and economic viability of our programs. That means pursuing projects that will generate real and lasting value for Oman and our shareholders, while identifying those areas of the business where we can do things more efficiently. Through a collaborative approach with contractors and several contract optimization reviews, we have been able to identify just under $500 million of savings over the Business Plan Period (2015-19) on total contract values of around $2.4 billion with further opportunities being pursued, and with our increasingly pervasive Lean value chain realization and waste reduction model. We have also launched an Every Rial Counts campaign raising awareness for staff regarding cost control.

What is your outlook for the private sector in the oil and gas sector?

In December 2013, a blueprint for the Omani oil and gas sector was unveiled which identified 53 real business opportunities for private firms and which aims at raising the local contribution from 18% to 32% by 2020. Local SMEs need to be able to execute work safely, professionally, and at commercially competitive rates, which is why we have signed an MoU with PASMED aimed at strengthening cooperation and collaboration on training, business advice, and knowledge exchange. There are some fantastic opportunities for SMEs to get involved in the oil and gas industry. We have already seen great strides in our Local Community Contractor (LCC) initiative, which we launched in 1998. This has given people living in our concession area the chance to establish their own SMEs to provide us with services and bid for supply contracts. We have reserved an LCC scope in main contracts and offered guidance and support and there are now more than 200 LCCs active in areas such as maintenance, logistics, electronics, civil engineering, manpower supply, and well services, with more than 3,000 Omanis working for them.

Looking ahead for the coming year, what are the major plans and targets for PDO?

We will continue to pursue a growth drive with momentum building to a production plateau of 600,000 bpd by 2019, while ensuring we discover new hydrocarbon reserves that match or exceed our production levels. We will aim, with our contractors, to create 7,000 job and training opportunities for Omanis by the end of the year, meaning we will have generated more than 20,000 since 2011.