Interview: Yousuf Al Ojaili

How will the Khazzan gas field contribute to economic development and diversification?

YOUSUF AL OJAILI: The exploitation of Khazzan’s gas fields is of great importance to Oman’s economic development and the sultanate’s diversification programme. Khazzan’s exploitation will reduce the gas deficit for years to come, by extracting volumes of gas which are significantly greater than the sultanate’s current levels of gas production. The production of natural gas will come with significant volumes of light oil condensate that will also be ready for export. Once Oman Gas Company completes the gas pipeline to Duqm, the majority of the gas extracted in Khazzan will go to the refinery and petrochemical facilities there, which will contribute to supporting the development of the sultanate’s industrial sector.

What else needs to be done to ensure a secure and plentiful supply of natural gas?

AL OJAILI: When it comes to ensuring a secure and plentiful supply of natural gas, it is vital to sustain the successes of international oil companies by investing in exploration, production and planning. Indeed, managing the gas deficit will require thinking beyond phase one and two of Khazzan. Nevertheless, now that phase one has started, the Ministry of Oil and Gas is reviewing plans for the second phase, which will require a final investment decision from the ministry. To that effect, BP has executed an appraisal of activities by drilling three wells, the results of which are in line with expectations in terms of volumes of gas and light oil condensate. A draft of phase two’s field development plan, which contains a cost estimate, is already being reviewed by the ministry.

To what extent should international oil companies contribute to national energy policies?

AL OJAILI: The authorities have repeatedly expressed their desire for international oil companies to be active in providing feedback on energy policies and to bid for related projects. The government readily involves them in the policy-making process and in discussions about the best ways to implement projects in Oman. The administration has also already reached out to them about implementing integrated project developments. In particular, the authorities would like them to be responsible for the next step in integrating upstream and downstream activities. Moreover, the administration has also encouraged international oil companies to undertake clean energy initiatives, especially regarding solar energy.

How can the oil and gas sector contribute to supporting the development of renewable energy?

AL OJAILI: The sultanate must invest in and implement initiatives to produce renewable energy locally. Continuing to invest in such projects should be a major priority. Moreover, international oil companies must support government-led initiatives to develop renewables, not only by providing project financing, but also by implementing these projects themselves.

Indeed, the development of renewable energy is not a foreign concept to most international oil companies either, many of whom already have a division dedicated to this field. For them, it is a matter of endeavouring to bid for these kinds of projects.

Even though the demand for oil and gas will increase in the near future, international oil companies s are aware of the growing importance of renewable energy and have already begun to place a much greater focus on this area by acquiring renewable energy firms within their portfolios for example.

The government itself has already expressed support for certain ventures. For example, Tanfeedh has identified energy resource diversification, including solar energy, as a priority, while the Oman Power and Water Procurement Company has already signalled its plans to launch a tender for a large-scale solar project.