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Bloomberg: Petroleum Oman Plans Oil Projects to Stem Decline (Update1)

By Ayesha Daya

Feb. 11 (Bloomberg) — Petroleum Development Oman, a state- controlled company in which Royal Dutch Shell Plc is the largest foreign investor, is planning dozens of new oil-field projects by 2012 to stem a decline in production.

“We will be executing eight new field-development projects, each of which is valued at over $100 million, and a further 50 new field-development projects worth between $20 million and $100 million each,” Managing Director John Malcolm said today during a briefing at the company’s Mina al-Fahal headquarters, near the capital Muscat.

Petroleum Development’s oil output, which accounts for almost four fifths of the country’s total production, will fall 2 percent this year to average 550,000 barrels a day. The company’s production averaged 561,000 barrels a day last year, Malcolm said.

Oman, the largest Arab oil producer that isn’t a member of the Organization of Petroleum Exporting Countries, is seeking the help of international oil companies to stem a six-year oil output decline.

The country’s oil production fell by almost a quarter between 2001 and 2006, from 961,000 to 743,000 barrels a day, according to BP Plc. It averaged 710,000 barrels a day in 2007, Deputy Oil Minister Nasser bin Khamis al-Jashmi said today.

Petroleum Development, or PDO, expects output to remain around 550,000 barrels a day until 2010, when enhanced oil recovery technology projects should help increase it, Malcolm said.

Shell owns 34 percent of Petroleum Development Oman. Total SA has a 4 percent stake and the Omani government owns 60 percent.

To contact the reporter on this story: Ayesha Daya in Muscat [email protected]

Last Updated: February 11, 2008 03:34 EST

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