Consolidation

All through the 1970s, PD(O) strove to maintain its production and replace its reserves while developing its professionalism. Some significant discoveries early in the decade contributed to that objective: Ghaba North in 1972, followed by Saih Nihayda, Saih Rawl, Qarn Alam and Habur. All five fields were on stream by 1975, the crude oil being transported via a new 20-inch (510 mm) pipeline to the main pipeline 75 kilometers east of Fahud. Thanks in part to these new sources of oil, production averaged 281,778 barrels per day (44,799.1 m³/d) (bpd) in 1972 and 341,000 barrels per day (54,200 m³/d) in 1976/76.

The first half of the 1970s was important for other reasons as well. On 1 January 1974 the Government of Oman acquired a 25% shareholding in the Petroleum Development (Oman); six months later the shareholding was increased to 60%, backdated to the beginning of the year. As a result, the foreign interest in PD(O) was now made up of the Shell (34%), Compagnie Française des Petroles (4%) and Partex (2%). These shareholdings have remained unchanged to the present day. The company, however, underwent a change six years later. On 15 May 1980, it was registered by Royal Decree as a limited liability company under the name Petroleum Development Oman — now without parentheses in its name. Its current nautilus logo was also introduced then.

Maturity (1994–2002)

By the end of 2000 PDO witnessed an increase in production. This was due to the increase in production arose from the application of the latest technology to increase oil recovery in existing fields. And some of the production increase over the years was made up of "new oil" from fields that were not only found but also developed at an ever-accelerating pace. During the period 1967–1980 all of PDO's production came from 11 fields; by 1988, 50 fields provided the sum total of PDO's oil output; by 1990 it was 60, and in 1999 it was nearly 100.

When PDO's gas-exploration campaign in the early 1990s made it clear how bountiful the country's gas fields were, the Government decided to establish a completely new industry: the export of liquefied natural gas (LNG). In 1996 PDO concluded an agreement with the Government to develop the central Oman gas fields in order to supply gas to an LNG plant in Qalhat, near Sur. To fulfill its end of the agreement, the company had to drill wells, hook them up to a new gas processing plant at Saih Rawl, and then transport the processed gas via a 352-kilometre pipeline to Qalhat. Furthermore, PDO would then be responsible for guaranteeing the delivery of gas for 25 years.

This upstream LNG project, costing $1.2 billion, is the single biggest project in PDO's history. And it was executed as planned. The Saih Rawl Central Processing Plant and the gas pipeline from Saih Rawl to Qalhat were dedicated to the nation in November 1999, the first downstream cargo of LNG was shipped to Korea in April 2000, and His Majesty the Sultan officially opened the LNG plant six months later.

Having built up such momentum in its oil production as it entered the 1990s, the Company fully expected the trend to continue. Unfortunately, the company's field-development strategy for the start of the 21st century – based on incremental infill drilling with horizontal wells and extensive waterflooding – had its momentum dissipated before the waterflooding projects, which require comprehensive reservoir studies, could be fully implemented. The natural production-rate decline of its major oil fields eventually caught up with the Company at the start of the millennium. In 1997, the 35-year old Yibal field began to decline in production. Two scientific papers published in 2003 showed a decline of about 12 percent annually since 1997, with 5 percent being the regional average.^[4]

Sustainability (2002–present)

Following a comprehensive review in 2002 that led to a sweeping change programme, PDO laid out ambitious production-recovery plans based not only on waterflooding but also on enhanced oil recovery (EOR) techniques: the application of heat, chemicals or gas solvents to alter the way oil or injected water flows in a reservoir. But, in order for them to be sustainable in the long run, the plans had to be executed for substantially less money than originally envisaged, making them all the more challenging. A total of $2 billion in cost savings over the five-year period 2002–2008 were incorporated into the company's budget. Fortunately, because of the long-term nature of investments that would be required, the Omani Government agreed at the end of 2004 to extend PDO's exploration and production concession and operating agreements for 40 years – until 2044.

Meanwhile, gas continues to be a growth area for the company. A new gas-processing plant was commissioned in Saih Nihayda in 2005, and another one is due in 2008 for PDO's newest gas field in Kauther. With the addition of those two processing plants, nearly one-third of the hydrocarbon energy that PDO supplies will come from natural gas—the fuel that has a central role in the Government's economic diversification plans.

Faced with oil prices above $100 a barrel and sinking field capacities, PDO was one of the many companies to introduce in-site combustion, an enhanced oil recovery technique involving lighting fires within the reservoirs, in 2008.^[5]

In 2010, the company announced the discovery of three new oil- and one gas field.^[6]

Since 2010, PDO has been working on the Miraah Solar Project, a 1,021 megawatt solar thermal facility, which is to be used in EOR from 2017/2018 onwards.^[7][8]

In 2011, a series of strikes and protests took place in Oman that also involved hundreds of PDO workers demanding higher wages.^[9]

Since the decline of natural production capacity, PDO has invested heavily to keep up and try to increase production again. Having to rely on marginal wells and enhanced oil recovery techniques more and more, the overall quality of oil is getting heavier and drifting down said the director of Purvin & Gertz, an international energy consulting firm, in 2011.^[10]

In 2013, a team of members from Manpower Ministry and Oman's Trade Union Federation found nearly 50 labor law violations and mistakes in safety norms during an inspection at PDO's Fahud facilities.^[11]

In 2014, P. Mohamed Ali, the former managing director of Galfar Engineering and Contracting, was sentenced to three years in jail for bribes made to PDO. In the same year Juma Al Hinai, the former head of the tender committee at PDO, was also charged with bribery and sentenced to three years in jail, including a fine of 600,000 rials. He was banned from public office for 20 years.^[12][13] Subsequently, the head of PDO warned all contractors to adhere to anti-bribery and -corruption policies.^[14]

In 2016, PDO launched a $3.4 billion loan program with HSBC bank.^[15] In the same year, PDO signed a contract with GE Oil & Gas to provide Progressive cavity pump (PCP) equipment and related services from late 2016 onwards.^[16]

In 2017, following many years of reconstruction and oilfield optimization, PDO confirmed a new combined oil, gas and condensate production record (1.293 million barrels of oil equivalent per day, BOE) for 2016. The company is still faced with a low price environment and continues to work on cost controlling measures.^[17][18] The company in 2017 also celebrated 50 years of oil exports and announced a continually growing expansion into hydrocarbon and renewable energy generation and water management – turning PDO into a fully diversified energy company. Around 80% of operations are estimated to remain in the oil and gas sector until 2027.^[19][20]

The largest onshore discovery in 2018 was a gas-condensate area, found on the Mabrouk North East field, operated by PDO.^[21]

Board of directors

The Board consists of twelve members and includes the chairman, who is the Minister of Oil & Gas His Excellency Dr. Mohammed bin Hamad bin Saif al Rumhy, who represents the Government of Oman and representation from PDO's private shareholders, Royal Dutch Shell, Total and Partex.

Managing Director's Committee

The Managing Director's Committee (MDC) shares responsibility for the company's overall performance and business direction. The committee is headed by the managing director who is assisted by fifteen other Directors, who are responsible for setting the technical standards, the allocation of staff and their development.

Oil exploration and production

PDO finds oil fields and develops them into productive assets by drilling wells and constructing and operating various hydrocarbon treatment and transport facilities. The crude oil that is produced from the fields is not sold by the company but rather delivered to a storage facility at Mina al Fahal, where it is loaded onto seagoing tankers at the discretion of the company's shareholders. As such, the Company does not earn any money from the sale of oil; its shareholders do. The shareholders in turn cover all budgeted operating and capital expenditure.

Gas exploration and production

PDO also finds, develops and operates natural gas fields and their associated production systems all on behalf of the Government of Oman. The Company delivers gas to the Government Gas System, which supplies fuel for most of Oman's power stations and some of its industries, and to the Oman LNG plant at Qalhat, near Sur. As part of its gas production operations, PDO also supplies some 50,000 barrels per day (7,900 m³/d) of condensate liquid hydrocarbons that condense out of natural gas and about 200 tonnes per day of liquefied petroleum gas, which is mainly used for cooking.

Solar

Since 2010, PDO has been working together with partnering GlassPoint to create the Miraah Solar Project, a 1,021 megawatt solar thermal facility which has been under construction in Southern Oman since 2015. The facility produces steam, which will be used for thermal enhanced oil recovery (EOR), extracting heavy oils from the Amal oilfield. The plant is one of the largest solar plants in the world and will generate around 6,000 tons of solar steam every day, and by replacing the current EOR system which relies on the burning of natural gas, it will reduce CO₂ emissions by over 300,000 tons annually.^[8]

Education and training

In addition, PDO plays a key role in educating and developing young Omani talent through its comprehensive education and training programmes. It also supports and encourages local businesses and communities through its Business Development Centre. PDO believes that the sustainable development of the country is furthered through its education and training initiatives and through its efforts to stimulate successful Omani businesses throughout the country. The PDO established the Oman Oil and Gas Exhibition Centre in Muscat in 1995 to educate those in fossil fuel development in the country.