Oman’s Production Drops 6.1%, Exports 7.6%

22 June 2004

Oman’s average daily crude oil production dropped 6.1% during the first four months of 2004 to 785,500 barrels, from 836,800 during the same period last year. Exports dropped 7.6%. This reflects peaking in production, as shown in the chart to the right.

Oman has recognized that its dependency on maturing oilfields requires diversification, and it has been building up its natural gas and LNG production capabilities aggressively. Still, the speed of the drop has to startle. Just five years ago, pieces were being written about the aggressive and productive use of technology in the Omani fields.

The largest Omani field, however, is Yibal, and it was the collapse in production in Yibal that brought Shell to its startling writedown of reserves earlier in the year.

As an ironic counterpoint to the news coming from Oman, OPEC called on non-OPEC producers, including Oman, to increase production to help stabilize the global oil situation.

Production peaking is inexorable. We need realistic plans about our energy future laid across short, medium and long-term timelines. Hydrogen may be the long-term solution; it may not. When JFK set the stategic vision for going to the moon, he specified the goal (man-on-moon) not the means. I worry about a research and development agenda that has already essentially concluded what the right answer will be through its funding. (I.e., the hydrogen project.) Let’s continue to invest in hydrogen research, but let’s also invest in the short term, in areas such as renewables, biofuels, engine research, fuel efficiency and emissions standards. And then let’s see what wins. The goal is sustainable energy and transportation, not necessarily hydrogen energy and transportation.