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Oman 2016 | ENERGY | INTERVIEW

TBY talks to Gong Changli, CEO of Daleel Petroleum, on adjusting operations to adapt to challenges, and the evolution of Oman's oil sector along with economic diversification.

Gong Changli
BIOGRAPHY
Gong Changli has been the CEO of Daleel Petroleum LLC since 2010. He holds a BSc in Petroleum Engineering from China Northeast Petroleum University as well as an MBA from The Haskayne School of Business, Canada. He has enjoyed 25 years work experience in the oil and gas industry. During his career, he worked as a Petroleum Engineer for 16 years with Down-Hole Engineering Service Company of CNPC Jilin Petroleum Group, mainly focusing on Hydraulic Fracturing. He later moved to CNPC Dagang Oil Field Company as the Project Manager of Zhaodong Offshore Project, JMC Chairman of C4 project within the offshore project in Bohai Bay, Tianjin, China. His first overseas project was Rumaila Project in Iraq as the HR representative and Operation Committee Member on behalf of CNPC and the Business and Planning Manager of CNPC Iraq International.

What is the current positioning of Daleel Oil in the oil and gas sector?

Daleel Petroleum LLC is one of the key contributors to Oman's economy. It was established in 2002, as a JV in terms of 50/50 shared by CNPC (China National Petroleum Corporation) and MB Holding, an Omani company. Over the past 12 years, companying with the development of the Sultanate of Oman, Daleel's daily rate has increased from 4,500 bpd to the current level of above 45,000 bpd. Despite the fact that we are limited by a smaller concession, only around 1,000 square km, we are keeping the position as the third oil producer in Oman, after PDO and Oxy.

How would you summarize Daleel's performance over the past year?

It was a challenging but profitable year for Daleel. In this year, a new 3D seismic acquisition was completed, which covered both shallow and deep formation with wide azimuth and high-density coverage. 65 wells were drilled with rigs, and more than 200 jobs were completed with CTUs, and about 180 jobs were accomplished with hoists. Our production daily has been made a very good showing by reaching a level of 44,000 bpd on average.

How are low oil prices affecting your business, and what strategies are you employing to adapt?

The oil prices have already impacted our operations as well as other operators, and we have already trimmed down our work program and budget for this year. We expect it not to change significantly until the end of the year. When we saw a trend in the decline of oil prices, we took early actions in January, and our strategy now is to focus more on optimization of the projects and the daily operations. Some projects will be delayed to fit within the budget, but overall, which will not have too much impact on operations. At the same time, we are working together with our contractors to close gaps and reduce costs by optimizing the value chain. Exploration-wise we have not changed our strategy; we will continue with that program because it will lead to future growth. At Daleel, we are taking this opportunity to promote the operational efficiency.

How is the sector transforming, and what changes will be essential for the evolution of the industry in Oman?

The sector contributes to about 80% of GDP. At the moment it is a little less, but it still remains the main contributor to Oman's economy. In the coming years this situation is unlikely to change. Therefore more capital is needed in terms of investment to strengthen the sector, but at the same time, the government has a vision for diversification of the economy through tourism, SMEs, and so forth. This will be a gradual process, and that instead of cost cutting, the government needs an increase in contributions from other sectors in order to reduce the percentage of the oil and gas on GDP. In general, the diversification is a good strategy for Oman but needs to identify how to diversify. The oil and gas sector could still need more investment because of the enhancement of current sector as well as the exploration of many untapped reserves.