Introduction

Petroleum development Oman (PDO) is the sultanate`s main exploration and production company,
accounting for more than 8o% of the country`s crude oil production and nearly all of natural gas supply.
The company is majority owned by the government of Oman (which has a60% interest), (shell (which has 34%
interest), total (which has 4% interest) and PARTEX (which has a 2% interest). The first commercial oil was
made in 1962, and the first consignment of oil was exported 1967.
PDO, also finds develops and operates natural gas fields and their associated production system –all on behalf
of the government of Oman.
The company drives gas to the government gas system, which supplies fuel for most of Oman’s power stations
and some of its industries. It also supplies gas to Oman liquefied natural gas (OLNG) and QALHAT liquefied
natural gas (QLNG) PLANTS NEAR sur.
As part of its gas production operations, PDO also supplies some 70,000 barrels per day of condensate (liquid
hydrocarbons produced alongside natural gas) and about 250 tones per day of liquefied petroleum gas, which is
chiefly used for cooking.

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 Company Successful History

Oman's growth into a successful oil- and gas-producing nation had humble beginnings — so humble, in fact,
that it began with a dud. A geological survey of the country in 1925 found no conclusive evidence of oil. Twelve
years later, however, when geologists began intensively searching for oil in neighbouring Saudi Arabia, Oman's
Sultan Said bin Taimur granted a 75-year concession to the Iraq Petroleum Company (IPC). Pausing only for
the Second World War, exploration for oil was underway in Oman. The exploration and production operations
were to be run on behalf of the IPC by Petroleum Development (Oman and Dhofar) Ltd.
The operating company had four shareholders, each with an interest of 23.75%: the Royal Dutch/Shell Group,
the Anglo-Persian Company (which would eventually become the British Petroleum Company, or BP),
Compagnie Française des Pétroles (whose convoluted lineage would make it a predecessor of today’s TotalFina-
Elf) and the Near East Development Company (whose likewise convoluted lineage would make it a subsidiary
of today’s ExxonMobil). The remaining 5% stake was held by a fifth shareholder, Partex.

With little or no infrastructure to assist survival in Oman's hostile desert environment, the early explorationists
confronted hard times. Problems were compounded by political unrest. The Sumail Gap, a vital route to the
interior from Muscat, was often made impassable by the hostilities between warring tribes. As a consequence,
the logistics of supply were problematic.

When the IPC finally decided to drill its first well in Fahud in early 1956, supplies had to be transported from
Duqm in the south of the country, across more than 300 kilometres of some of Oman's most deserted and
inhospitable terrain. And the hardships endured were all for naught: the well was dry.
Further dry wells were drilled, and this lack of success, combined with worsening logistical problems and a glut
of oil on the world market, led most of the partners to withdraw from the venture in 1960. Only Shell and Partex
opted to remain in Oman to continue the search for oil. Their optimism was soon to pay off, however: they
struck oil at Yibal in 1962 — and from these inauspicious beginnings an oil-producing nation was born.

Emergence (1962 – 1970)

When, in 1963, the Natih field was discovered, followed closely by success at Fahud,
investment in a pipeline to the coast and all the other hardware necessary to transport and
export Oman's crude could be made. A 276-kilometre pipeline requiring 60,000 tons of
steel pipe was laid, the labour being provided by the inhabitants of whichever villages
happened to be near the worksite.

The pipe laying was followed closely by the construction of an industrial complex at Saih al Maleh (later re-
named Mina al Fahal), the building of a tank farm, the installation of single-buoy moorings for sea-going
tankers and the erection of a 20-megawatt power plant. The whole development — including the pipeline, the
coastal industrial area, the tank farm, the marine terminal, a chain of radio repeater stations and housing for staff
at Ras al Hamra — cost $70 million.

The first export of Omani oil took place on 27 July 1967. The original debit note shows that the consignment
consisted of 543,800 barrels of oil valued at $1.42 a barrel. A month before, in June, the Compagnie Française
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des Pétroles rejoined the partnership by taking over two-thirds of Partex's equity share, resulting in the
following shareholding in the company that by then had changed its name to Petroleum Development (Oman):
Shell 85%, Compagnie Francaise des Petroles 10% and Partex 5%.

On 23 July 1970 His Majesty Sultan Qaboos took over from his father as ruler of the country. He made his first
visit to the PD(O) offices on 18 August 1970.
Consolidation (1970 – 1979)

All through the 1970's, 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 pipeline to the main pipeline 75 kilometers east of Fahud. Thanks
in part to these new sources of oil, production averaged a respectable 341,000 barrels per day in 1975.

The oil price hike in 1973 greatly improved the economics of producing oil in remote locations. As a
consequence, the focus of exploration activity was moved to the eastern flank of the south Oman geological
basin. Wells soon revealed the Amal and Amin fields, amongst others. The Marmul field, considered
uneconomic to develop when it was discovered in 1957, was now shown to be commercially viable upon
reappraisal. The high oil prices compensated for the fact that the Marmul crude oil was heavy and viscous.
These and other oil fields in south Oman would play a significant role in the growth of reserves and production
in the coming years.

The first half of the 1970's 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.

Growth (1979 – 1994)

In the early 1980's production rose to new record levels, dispelling, it seemed, any doubts about the future of
Oman's oil and gas industry. By the end of 1984 average daily production had risen to 400,000 barrels a day and
reserves stood at 3.8 billion barrels.

Meanwhile, the Company had become involved in setting up the Government Gas System , to provide natural
gas from the interior to industry on the coast. And it was remarkably successful in that undertaking.

Then, in 1986, the oil price collapsed. Almost instantly PDO was required to cut costs while increasing
production and maintaining reserves. This it did with remarkable success. The Company turned its focus on
innovation and experimentation. Technological leaps in processing the huge volumes of data acquired in three-
dimensional seismic surveys helped PDO to explore with great success during this period. Horizontal wells ,
which made their debut in 1986, yielded between two and four times the production from any one given well.
(They have since become the norm in PDO.) Time and again the Company broke its own records for drilling
wells in the shortest time and for drilling the longest horizontal wells.

Maturity (1994 – 2002)

By the end of 2000 PDO witnessed an increase in production. This was due to the increase in production arose
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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 1990's 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 of 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 1990’s, 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. And to make matters worse, its business had fundamentally changed: its new
fields were coming in smaller sizes; its new wells were delivering less oil; its costs were going up. The fact was
that the Company’s operating model – the way its was carrying out its business – was not sustainable in the
longer term.

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.

PDO thus now faces a formidable set of challenges. But the execution of its EOR projects, the expansion of its
gas production and the implementation new ways of working mean that, technically as well as socially and
environmentally, PDO will remain in the forefront of the region’s oil and gas business.

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 Company Structure

Since 2005 PDO has been organized as a ‘matrix’ of ‘assets’ and ‘functions’. The assets are the
organizational units that are responsible for the production of hydrocarbons, whereas the functions are the
organizational units that are responsible for the excellence of the various disciplines that are brought to bear
by the assets. The functions thus set technical standards and define the Company’s business processes,
whereas the assets implement the standards and processes as they execute the Company’s plans.

Leadership Team
The Directors of the North, South and Gas assets sit on a committee consisting of 12 members that include
the Deputy Managing Director and the Managing Director, who is the chairman. This Managing Director’s
Committee shares responsibility for the Company’s overall performance and business direction. The
Functional Directors are responsible for setting the technical standards, the allocation of staff and their
development in a particular discipline. They determine how the process is to work and are therefore the
“process owners”. The assets are responsible for the implementation of those technical standards and
processes owned by the functions.

Board of Directors
A Board of Directors provides objectives and guidelines to the Managing Director. The Board consists of
twelve members; seven “including the Chairman, who is the Minister of Oil & Gas His Excellency Dr.
Mohammed bin Hamad al Rumhy” represent the Government of Oman, and five represent PDO’s private
shareholders (Royal Dutch Shell, Total and Partex).

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 Recent Highlights

New Discoveries

In 2008, two new oil fields was discovered at Taliah and Malaan West, which is located

within PDO’s Lekhwair cluster of fields in northwest Oman.They are both part of the Upper

Shuaiba geological formation, which contains many of the reservoirs of PDO’s main fields.

Another new discovery was made at Rabab Southeast and the oil field is expected to start

production in late-2009. Oil from the field will be processed through the existing conventional

production facilities at Harweel, in south Oman.

A new gas field development project at Haban was successfully brought onstream in 2008.

Three new gas compression projects were also completed at Barik,Yibal and Saih Nihayda.

Together, they made an important contribution to the ability to continue supplying gas to

PDO’s customers, as it has for more than 30 years.

Enhanced oil Recovery ((EOR)

As of June 2009, the Harweel miscible-gas injection project was at an advanced stage. At Qarn Alam, a steam
injection project was progressing towards completion in 2010.The Company will install waste heat recovery
steam generation units linked to local power plants which will not only lead to substantial savings in fuel gas
but will also reduce the project’s carbon footprint. At Marmul, in south Oman, the Company is in handling
130,000 b/d of oil and water.

New Generation Seismic

Throughout 2009, PDO executed a major seismic campaign in south Oman.The survey using

state-of-the-art technology known as ‘new generation seismic’ is the largest and most sophisticated

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seismic gathering campaign ever undertaken by PDO.The first phase of the New Generation the process of
commissioning a polymer injection unit.

Conventional Developments In early 2009, the Company completed the Musallim project, one of several water
flood developments which will help sustain PDO’s oil production pending the completion of ongoing EOR
projects. A new plant was built which is capable of Birba 3D Survey will involves recording 120 terabytes of
raw data – more data than the grand total collected by all of PDO’s previous seismic surveys in the last 40 years.

FAHUD Collaboration Centre

In 2008, the Fahud Collaboration Centre was opened at twin centres in Mina al Fahal and Fahud.

It brings together petroleum and well engineers as well as geologists and operations staff from

the interior and the coast into a virtual working environment. The Collaboration Centre uses real

time communications technology to enable data sharing and to create a collaborative working model that is
having remarkable results, allowing PDO to maximise the potential offered by smart fields.

Record Social Investment

In 2008, PDO signed Memoranda of Understanding with 13 Government Ministries and local non-
governmental organizations covering 18 social investment projects.This was the biggest single batch of social
investment projects ever signed at one time and provides clear evidence of PDO’s continuing efforts to support
wider Omani society.

Must-Win Safety Projects

In 2009, PDO began implementing four Must-Win Safety Projects, each championed by a company director, in
the following areas: Road Safety, Worksite Hazards, Process Safety and Contractor Management. The projects’
intense efforts will be carefully coordinated over a limited period of time to achieve clearly specified goals.

Adopting a project approach is an effective way of driving change, but it does not ensure the stain ability of
that change. So a programme to incorporate the Must-Wins’ improvements into new standards and processes in
PDO’s framework for managing Health, Safety and Environment (HSE) will

simultaneously be pursued.

This change in approach to the execution of PDO’s HSE plan is intended to focus and energize the efforts of all
those involved in PDO’s business to raise their game permanently, to make PDO’s operations not only safer but
also more efficient in 2009 and beyond.

PDO has…

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Developed more than 125 oil and gas fields, which have been organised under three operating units, two
covering oil operations – one in the north and the other in the south of the country – and one covering all gas
operations.

Drilled more than 4,200 oil and gas wells.

Explored over a concession area of nearly 99,486 square kilometers.

Established a network of over 2,600 kilometers of pipelines, 34 gathering stations and 10 Production stations.

Maintained more than 5,500 kilometers of graded roads and around 800 kilometres of

Asphalted carriageway.

Built 3 permanent airports from which jet aircraft charted by PDO from Oman Aviation

Can operate.

Awarded contracts worth a total of US$ 233 million through on-line bidding in 2008.

Employed 4,187 Omanis as of the end of 2008.

Dedicated, in 2008, a total of 37,260 man-days to training and US$ 11 million to the

development of its staff (excluding HSE training).

Sponsored, in 2008, more than 159 Omanis who were pursuing undergraduate and post

graduate studies abroad.

Run 665 learning programmes (including HSE programmes) in 2008.

Cross-posted in 2008 some 57 Omani employees in international oil companies.

Generated in 2008 about 603MW of electrical power, mostly for its operations but some of

This was supplied to the national power grid.

Been re-certified (for the third time) as being fully compliant with the ISO 14001 standards

For the Environmental Management System covering the entirety of its operations.

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 The Conclusion
 The Oil sectors:

Petroleum Development Oman (PDO) - which produces around 89% of the Sultanate’s crude and oil
condensates - and the other oil companies are moving ahead with their plans and efforts to increase oil
production capacity and offset the relative decline in productivity the
country has been witnessing since 2002. In 2005 average daily production
totalled 774, 800 barrels, including 66,300 barrels of oil condensates.
Production has increased modestly since Occidental began producing from
the Mukhaiznah field in September 2005.
Around 718,100 barrels of oil per day were exported in 2005. Most of it
(32.2%) went to China, while the remainder was exported to Thailand
(16.8%), Japan (16.4%), South Korea (15%) and several other countries.
The Oman Oil Refinery Company received around 86,600 barrels per day to
be refined for local consumption, while the surplus was exported.
The Sultanate has crude oil and oil condensate reserves totalling over 4,803 million barrels, with PDO’s
reserves accounting for over 92% of this figure. In 2005 four prospecting agreements were signed: with India’s
Reliance Industries in Concession Area 18 in the Gulf of Oman, with the Irish Company Circle Oil in
Concession Area 49 in the Governorate of Dhofar and the offshore Concession Area 52 in the sea between
Sawqarah Bay and the Omani-Yemeni marine territorial border, and with the Swedish company Gott Oil and the
Danish company Odin Energy in Concession Area 15 in the Dhahirah Region. These companies will carry out a
series of exploration programmes over a three-year period.
During 2005 14 companies carried out prospecting operations in 22 concession areas. Some 18 exploratory
wells were drilled and a number of geological and geophysical surveys carried out. As a result of these
operations PDO was able to add 23.08 million barrels of crude to the general reserves, while Occidental
succeeded in adding around 6.15 million barrels to the reserves.
An agreement has been signed with Occidental Petroleum and Liwa Energy to invest over US$2 billion in
developing the Mukhaiznah field. Work has also continued on the US$1,300 million Sohar Refinery, which
went into production in August 2006 with a productive capacity of 116,400 barrels per day. PDO and Occidental
both have ongoing prospecting programmes. The West Asia Oil and Gas Exhibition and Conference, which took
place in Muscat in April 2006, was attended by 150 companies from all over the world. On 16th April 2006

9
PDO launched the “Oil and Gas Dictionary” - the first specialist dictionary of its kind - which includes around
1,500 terms and expressions used in the oil and gas industries. The launch coincided with the “Muscat -Arab
Culture Capital 2006” activities.

 The Gas sectors:

The natural gas sector grew by around 21.6% a year during the Sixth Five-year Plan (2001- 2005), considerably
higher than the projected growth of 16.6%. Natural gas revenues in
the 2006 budget amounted to RO394 million - some 44.5% higher
than the 2005 budget gas revenues, which totalled RO 273 million.
In 2005 gas contributed 9% to the budget revenues, while in 2006
they account for 11%.
The Sultanate’s liquefied natural gas (LNG) production has
increased significantly - especially since the third LNG train in Qalhat went into actual production with an
annual productive capacity of 3.5 million tonnes, boosting the country’s natural gas production to 10.1 million
tonnes a year. The natural gas sector’s contribution to GDP is expected to increase to around 9.2% by 2010. Its
added value is also set to rise, particularly with the addition of the gas tankers “Ibri” and “Ibra” to the Oman
Shipping Company’s fleet in June 2006; these new vessels will transport shipments of Omani gas to customers
in Asia, Europe and the United States.
In 2005 the Sultanate produced around 917,746 million cubic feet of natural gas, comprising 270,562 million
cubic feet of associated gas and 647,184 million cubic feet of non-associated gas. Average daily production was
about 2,514.4 million cubic feet - a rise of 7.61% compared with the 2004 figure. LNG exports in 2005 totalled
around 6.98 million metric tonnes. A further 182,000 metric tonnes of gas liquids was exported to the United
Arab Emirates (UAE), while 40,910 million cubic feet of natural gas was exported to the UAE through the
government gas line system, which is managed by the Oman Gas Company.
Last year some 917,404 million cubic feet of natural gas was either used locally in power stations, industrial
estates, industrial projects and the oil fields, or exported.
In 2005 the third natural gas train, operated by Qalhat LNG, went into production with an annual output
capacity of 3.5 million tonnes. This project, which cost around US$645 million to implement, exported its first
shipment to Spain in December 2005. The US$150 million gas treatment station at Seih Nihayda field opened
on 19/12/2005, raising daily output capacity to over 80 million cubic feet; this will help meet the growing
demand for natural gas in the major industrial projects that are being set up, particularly the projects on the
Sohar Industrial Estate. There are also plans to expand prospecting and production operations.

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Output is set to receive an additional boost when a Thai company – PTTEP - becomes involved in gas
production in Oman in 2006. The Sultanate currently has proven gas reserves in excess of 24 trillion cubic feet,
in addition to a further 33.8 trillion cubic feet of expected reserves.

Exhibitions

Major oil & gas companies start signing up for OGWA 2010

Muscat, Oman, 3 May 2009 – A growing number of local and international oil & gas companies have already
confirmed their participation at the seventh Oil & Gas West Asia (OGWA) Exhibition and Conference, which
will be held on April 11-13, 2010 in Muscat.

Held under the patronage of the Ministry of Oil & Gas and supported by Petroleum Development Oman (PDO),
OGWA 2010 will showcase the operations of major oil & gas firms that are contributing to the continued
development of the vibrant oil & gas industry in Oman and in the wider region. The international exhibition will
also present the latest equipment, modern technologies, and professional services required in exploration and
production activities, while the accompanying technical conference will discuss best practices, market trends as
well as the challenges currently facing the industry.

“OGWA 2010 will strongly highlight the industry’s growth through the years, and it will be an opportunity for
the region’s industry professionals to get together and meet new contacts as they inspect the products and
equipment on display,” said C.J. Paul, general manager of Omanexpo LLC, the leading exhibition management
company in the sultanate.

First held in 1998, OGWA is the biggest event in Oman for the oil & gas industry, and it is now recognized as
an important fixture in the region’s industry events calendar. The previous edition of OGWA in 2008 featured
over 125 stands from more than 230 oil, gas and petrochemical producers, suppliers, manufacturers,
distributors, agents and service providers. Some 400 delegates also attended the OGWA 2008 SPE conference,
and up to 3,500 industry professionals visited the exhibition.

Thus far, among the major oil & gas companies that have already signed up for OGWA 2010 include Qatar
Petroleum, Dolphin Energy, Oman Gas Company, Partex Oil & Gas, Sichuan Honghua Petroleum Equipment
Co., and MB Petroleum. Many others are expected to finalize their participation soon, and judging from the
strong initial response received by the organisers, the OGWA 2010 exhibition is expected to register up to 20%
growth in terms of exhibition area covered and total number of participants.

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The associated OGWA 2010 conference is also expected to attract more delegates, since the event will once
again be managed and organised by the Society of Petroleum Engineers (SPE). The direct involvement of SPE
will guarantee the high quality of the technical presentations and the excellent caliber of the speakers, thus
ensuring that the topics discussed will be truly relevant to industry professionals.

For stall reservations or for more information on OGWA 2010, please contact Clemento Fernandes, Project
Manager, at tel. no. +968-24660124, mobile no. +968-99442802, or e-mail clemento@omanexpo.com . More
details about the event are also available online at http://www.ogwaexpo.com/ .

Oil & gas industry professionals invited to the biggest ever edition of OGWA

Muscat, Oman, 12 April 2008 – The Oil & Gas West Asia (OGWA) 2008 Exhibition and Conference, which
will be held on April 21-23, will be the biggest ever event in Oman for the oil & gas industry with the
participation of more than 150 local and international companies as well as a large number of industry
professionals from all over the world.

“The OGWA 2008 exhibition, which will feature companies from more than 20 countries worldwide, will
showcase the widest range of innovative products, equipment and technologies for the region’s vibrant oil & gas
industry,” said C.J. Paul, general manager of Omanexpo LLC, the leading organiser of trade and consumer
shows in the sultanate.

Paul revealed that leading the list of exhibitors are national oil & gas companies in the GCC such as Petroleum
Development Oman (PDO), Oman LNG, the Abu Dhabi National Oil Company (ADNOC), Qatar Petroleum,
the Bahrain Petroleum Company and the Bahrain National Gas Company. The three-day exhibition, which will
be held at the Oman International Exhibition Centre, will also feature major international oil & gas firms
including BG Oman, BP Oman, Dolphin Energy, Occidental of Oman, Petrofac, Schlumberger, and Total S.A.

Omani companies that directly serve the oil & gas industry will also have a strong presence in the exhibition.
Among these are Abraj Energy Services, Advanced Oilfield Technology Company, Development Services, Gulf
Services & Industrial Supplies Co., Hi-Tech Services & Supplies, International Business Development, MB
Holding Company, Oman Gas Company, Oman Oil Industry Supplies & Services Co., Oman National
Engineering & Investment Co.

SAOG, Oman Oilfields Supply Center, Oman Refineries and Petrochemicals Company, PTTEP Oman
Company Limited, Riyam Engineering & Services, Seven Seas Petroleum, the Shaksy Group of Companies,
Technical Supplies International, and Vanguard Engineering & Oilfield Services Co.

All in all, OGWA 2008 exhibitors will come from at least 22 countries, namely Australia, Bahrain, Belgium,
China, Egypt, France, Germany, India, Iran, Italy, Kuwait, Malaysia, Norway, Oman, Qatar, Russia, Saudi
Arabia, Singapore, South Korea, UAE, UK and USA. The other major international exhibitors include the
Arabian Pipes Company, Atlas Copco Services Middle East, Emirates General Petroleum Corporation,
Globetech, Mott MacDonald & Company, Paglierani SpA, PCM of France, and Weatherford.

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In addition to the exhibition, OGWA 2008 will also feature an international conference dubbed the “SPE EOR
Conference at OGWA.” Also scheduled on April 21-23 and to be held at the Golden Tulip Hotel, the conference
is being managed by the Society of Petroleum Engineers (SPE), a non-profit professional association whose
members from more than 115 countries worldwide are engaged in energy resources development and
production.

The conference will bring together global experts in all forms of EOR techniques to present, share, and discus
their experiences in the area. The technical program will cover the latest advances in thermal, gas, and chemical
EOR methods; EOR selection criteria; surveillance techniques for locating remaining oil; and drivers and
challenges in implementing EOR.

Several field pilots and case studies will also be part of the discussions. According to the SPE, the conference
presents a great opportunity for practicing engineers and geoscientists involved in E&P work, and managers,
team leaders, technical professionals, and anyone who needs to improve recovery from their assets using EOR
would greatly benefit from attending.
The conference committee is spearheaded by Khalifa Al Hinai of the Ministry of Oil & Gas as conference
chairperson and Saif Al Hinai of PDO as the technical programme chairperson. The members of the committee
are Abdulaziz Al Kaabi of Saudi Aramco, Ali Al Gheity of PDO, Arafat Al Yafei of ADNOC, Bader Al Badi of
ADMA-OPCO, Xu Dong Jing of Shell Technology Oman, John Edwards of Schlumberger, Mahmoud Al
Hashmi of Halliburton, Mark Mahoney of Lufkin Industries, Suleiman Al Zakwani of Oman Oil, and S.
Bhattacharya of the Oil & Natural Gas Company (ONGC), India.

The SPE EOR Conference at OGWA is supported by PDO and Saudi Aramco as the platinum sponsors as well
as Occidental Petroleum and Schlumberger as the silver sponsors. The co-sponsors of the conference are the
Abu Dhabi Marine Operating Company (ADMA-OPCO), Calsep, Oman Gas Company (OGC), Partex Oil and
Gas, Petrofac, Shell, Weatherford and Zakum Development Company (ZADCO).

On the other hand, the OGWA 2008 exhibition is held under the patronage of the Ministry of Oil & Gas and
officially supported by Petroleum Development Oman (PDO) as well as BG Oman as the platinum sponsor and
BP Oman as the gold sponsor. The co-sponsors of the event are Oman LNG, Seven Seas Petroleum, Sharaf
Shipping Agency, and Weatherford.
The event also has the backing of leading media companies including Pipeline Magazine as the official
publication, MEED as the strategic partner, and Oil Review Middle East as the official magazine. The media
partners of the event are Upstream, Arab Oil & Gas Magazine, Gulf Oil & Gas.com, Oil & Gas News, Argus
Media, Biz Marine TV, theenergyinfo.com, and Business Today.

For stall reservations or for more information on the OGWA 2008 exhibition, please contact Clemento
Fernandes at tel. no. +968-24660124, mobile no. +968-99442802, or e-mail clemento@omanexpo.com. More
details about the event are also available online at http://www.ogwaexpo.com/.

To register for the SPE EOR Conference at OGWA 2008, please contact Nikki Youlden at tel. no. +971-4-
3903543, fax no +971-4-3664648, or e-mail nyoulden@spe.org. More information on the conference is

13
available at www.spe.org/08ogwa.

Preparations in high gear for the biggest oil & gas exhibition & conference in Oman

Muscat, Oman, 25 March 2008 – More than 150 companies from a total of 21 countries and a large number of
industry professionals from all over the world will be taking part in the Oil & Gas West Asia (OGWA) 2008
Exhibition and Conference, which will be held in the Sultanate of Oman on April 21-23.

“With the participation of local and international firms including many national oil & gas companies in the
GCC, OGWA 2008 will be the biggest ever event in Oman for the oil & gas industry since the inaugural edition
of the event in 1998,” said C.J. Paul, General Manager of Omanexpo LLC, the leading exhibition management
company in the sultanate.

Paul pointed out that the OGWA 2008 exhibition, which will be held at the Oman International Exhibition
Centre, will be a grand showcase of the technologies, products, equipment, and technical services for the oil &
gas industry in Oman and other parts of the region. Among the countries that will be represented in the
exhibition are Bahrain, China, Egypt, France, Germany, India, Iran, Italy, South Korea, Kuwait, Malaysia,
Norway, Oman, Qatar, Russia, Saudi Arabia, Singapore, UAE, UK and USA. Paul added during a press briefing
that the event will also prominently feature the operations and achievements of national oil & gas companies
such as Petroleum Development Oman (PDO), Oman LNG, the Abu Dhabi National Oil Company (ADNOC),
Qatar Petroleum (QP), the Bahrain Petroleum Company (BAPCO) and Bahrain National Gas Company.

Also present at the press conference were Khalifa bin Mubarak bin Ali Al-Hinai, Conference Chairman and
Technical Advisor to the Minister of Oil & Gas; Saif Al Hinai, Technical Program Chairperson of PDO; and
Waleed Refaay, Managing Director of SPE Middle East, North Africa and India.
The Society of Petroleum Engineers (SPE) is managing and organizing the international conference dubbed the
“SPE EOR Conference at OGWA,” which is scheduled on April 21-23 at the Golden Tulip Hotel. The
conference will have an executive keynote session featuring John Malcolm, Managing Director of PDO and
senior representatives from other national oil companies in the region. It will bring together global experts in all
forms of enhanced oil recovery (EOR) techniques to present, share, and discuss their experiences. The technical
program will cover the latest advances in thermal, gas, and chemical EOR methods; EOR selection criteria;
surveillance techniques for locating remaining oil; and drivers and challenges in implementing EOR. Several
field pilots and case studies will also be part of the discussions. According to the SPE, the conference presents a
great opportunity for practicing engineers and geoscientists involved in E&P work.

The SPE EOR Conference at OGWA is officially supported by PDO as the platinum sponsor, Schlumberger as
the silver sponsor, while the co-sponsors are Shell Development Oman, ADMA-OPCO, Weatherford, Petrofac,
and Oman Gas Company.

For its part, the OGWA 2008 exhibition is held under the patronage of the Ministry of Oil and Gas and officially
supported by Petroleum Development Oman (PDO) as well as BG Oman as the platinum sponsor and BP Oman
as the gold sponsor. The co-sponsors of the event are Oman LNG, Seven Seas Petroleum, Sharaf Shipping

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Agency, and Weatherford.

The exhibition also has the backing of leading media companies including Pipeline Magazine as the official
publication, MEED as the strategic partner, and Oil Review Middle East as the official magazine. The media
partners of the event are Upstream, Arab Oil & Gas Magazine, Gulf Oil & Gas.com, Oil & Gas News, Argus
Media, Biz Marine TV, theenergyinfo.com, and Business Today.
For stall reservations or for more information on the OGWA 2008 exhibition, please contact Clemento
Fernandes at tel. no. +968-24660124, mobile no. +968-99442802, or e-mail clemento@omanexpo.com. More
details about the event are also available online at http://www.ogwaexpo.com/.

To register for the SPE EOR Conference at OGWA 2008, please contact Nikki Youlden at tel. no. +971-4-
3903543, fax no +971-4-3664648, or e-mail nyoulden@spe.org .More information on the conference is
available at www.spe.org/08ogwa.

Oil & Gas West Asia 2008 to feature major players in oil & gas industry

Muscat, Oman, 12 January 2008 – A large number of local and international oil & gas companies, including
many leading players in the industry, have confirmed their participation in the Oil & Gas West Asia (OGWA)
2008 exhibition, which is scheduled on April 21-23 at the Oman International Exhibition Centre.

“OGWA 2008 is shaping up to the biggest ever gathering in Oman of oil & gas industry professionals as the
number of participating companies this year is already much higher than in previous editions of the event,” said
C.J. Paul, general manager of Omanexpo LLC, the leading exhibition management company in the sultanate.

Paul explained that the strong response to OGWA can be attributed mainly to the ongoing heightened
exploration and production activities in Oman, resulting in major opportunities for all companies directly
serving the industry and increasing the demand for oilfield equipment, services and technologies.

First held in 1998, OGWA is the only major event in Oman for the vibrant oil & gas industry throughout the
region. The three-day international exhibition showcases the products, operations as well as accomplishments of
oil & gas companies, and it provides industry professionals with an opportunity to network with their peers and
learn about the latest developments in the industry.

Held under the patronage of the Ministry of Oil & Gas, OGWA 2008 is officially supported by Petroleum
Development Oman (PDO) as well as BG Oman as the platinum sponsor, BP Oman as the gold sponsors, and
Oman LNG and Sharaf Shipping Agency as the co-sponsors. The exhibition also has the backing of leading
media companies including Pipeline Magazine as the official publication, MEED as the strategic partner, and
Oil Review Middle East as the official magazine.

In addition to the sponsors, the major exhibitors at OGWA 2008 will include national oil & gas companies such
as Qatar Petroleum and the Abu Dhabi National Oil Company. Among the other companies that will have a

15
strong presence in the exhibition are Occidental of Oman, Dolphin Energy, the Oman Refineries and
Petrochemicals Company, Total S.A., MB Petroleum, Petrofac International, Weatherford, Abraj Energy
Services, PTTEP Oman, and Oman Oilfields Supply Centre.

All in all, with still three months to go before the exhibition, more than 60 companies have already signed up
for OGWA 2008. The list of exhibitors also includes the Arabian Pipes Company, Intertek, Lufkin Industries,
Oman Gas Company, Atlas Copco, Barton Firtop Engineering Company, Expro, Shams Engineeering,
Peaceland Trading & Energy, Pioneer Oilfield Enterprises, Vanguard Engineeering, Mudhaher Establishment,
Pars Hassas, Arabian Pipecoating Company, Development Services, Elaf International, Seven Seas Petroleum,
Mott MacDonald, Globetech, PCM Oil & Gas, and Al Baha International. The countries that will be represented
in the exhibition include India, Iran, Germany, China, Egypt, the UK, USA, and all members of the GCC.

For more information OGWA 2008 or for stall reservations, please contact Clemento Fernandes at tel. no. +968-
2479033, mobile no. +968-99442802, or e-mail clemento@omanexpo.com. More details about the event are
also available online at http://www.ogwaexpo.com/.

 EXECUTIVE SUMMARY

The latest Oman Oil & Gas Report from BMI forecasts that the country will account for just 0.66% of Middle
East (ME) regional oil demand by 2013, while providing 2.50% of supply. Regional oil use of 8.24mn barrels
per day (b/d) in 2001 rose to an estimated 10.86mn b/d in 2008. It should average 11.09mn b/d in 2009 and then
rise to around 12.08mn b/d by 2013. Regional oil production was 22.87mn b/d in 2001, and in 2008 averaged an
estimated 25.94mn b/d. It is set to rise to 28.99mn b/d by 2013. Oil exports are growing steadily, because
demand growth is lagging the pace of supply expansion. In 2001, the region was exporting an average 14.63mn
b/d. This total had risen to an estimated 15.18mn b/d in 2008 and is forecast to reach 16.58mn b/d by 2013. Iraq
has the greatest production growth potential, followed by Qatar.
As regards natural gas, the region in 2008 consumed an estimated 386bn cubic metres (bcm), with demand of
511bcm targeted for 2013, representing 32.3% growth. Production of an estimated 407bcm in 2008 should reach
625bcm in 2013 (+53.8%), which implies net exports rising to 115bcm by the end of the period. In 2008, Oman
consumed an estimated 3.26% of the region’s gas, with its market share forecast at 3.23% by 2013. It
contributed an estimated 6.64% to 2008 regional gas production, and by 2013 will account for 5.60% of supply.
In terms of the OPEC basket of crudes, the average price in Q109 was an estimated US$45.78/bbl, down 13%
from the US$52.51 recorded during the previous three months. During the second quarter, there has been little
change to our view of oil market developments. BMI is forecasting an average OPEC basket price of
US$51.30/bbl, with the March gains being retained in April, before further recovery to a possible US$57.00 is
seen by June. For 2009, we are still assuming an average OPEC basket price of US$52.00/bbl (-45% y-o-y).
The BMI full-year forecast implies Brent crude at US$53.73, WTI averaging US$54.90/bbl and Urals at
US$52.66 for 2009.
For the whole of 2009, the BMI assumption for gasoline is an average US$56.89/bbl, with the price peaking at
a forecast monthly average of US$64.75 in December 2009. The overall y-o-y fall in 2009 gasoline prices is put
at 44.1%. For gasoil in 2009, the BMI forecast is for an average price of US$69.35/bbl, assuming a monthly
high of US$94.48/bbl in December. The full-year outturn represents a 42.8% fall from the 2008 level. The

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monthly average jet fuel price is forecast to range from US$53.75 in February to US$96.76/bbl in December,
proving an annual level of US$71.78/bbl. This compares with US$124.95/bbl in 2008.
Oman’s real GDP growth is now forecast by BMI to fall by 0.5% in 2009, following growth of 6.1% in 2008.
We are assuming 2.5% growth in 2010, 3.6% in 2011, followed by 3.5% in 2012 and 4.1% in 2013. We expect
oil demand to rise from an estimated 63,000b/d in 2008 to 78,000b/d in 2013. Partly state owned Petroleum
Development Oman (PDO) accounts for more than 90% of the oil and gas produced in the country, but relies
on international oil companies (IOCs) to maintain volumes. Our estimates assume 730,000b/d of 2009 oil and
liquids production, with output remaining around this level in 2010, before volumes again sink to 710,000b/d by
the end of the forecast period. Gas production should reach 35bcm by 2013, up from an estimated 27bcm in
2008. Consumption is expected to rise from 12.6bcm to 16.5bcm by the end of the forecast period, allowing
exports of 18.5bcm.
Between 2008 and 2018, we are forecasting a decrease in Omani oil production of 20.3%, with crude volumes
peaking at 730,000b/d in 2009/2010, before falling steadily to 582,000b/d by the end of the 10- year forecast
period. Oil consumption between 2008 and 2018 is set to increase by 57.6%, with growth slowing to an
assumed 5.0% per annum towards the end of the period and the country using 99,000b/d by 2018. Gas
production is expected to peak at 35bcm by 2013-2015, before slipping to 30bcm by the end of the period. With
2008-2018 demand growth of 51.6%, this provides an export capability peaking at 18.5bcm in 2013, before
falling to just under 11.0bcm by 2018. Details of BMI’s 10-year forecasts can be found in the appendix to this
report.
Oman still occupies sixth place behind Iran and Turkey in BMI’s updated Upstream Business Environment
rating. The country’s score benefits from a sound country risk profile, good licensing terms and a healthier
privatisation trend than that seen elsewhere in the region. The country is in the upper half of the league table in
BMI’s updated Downstream Business Environment rating, with a few high scores but near-term progress up the
rankings unlikely. It is ranked fourth behind Israel and in front of Qatar in spite of low scores for refining
capacity, oil demand, retail site intensity and the gas demand growth outlook. Healthy country risk factors, oil
demand growth potential and moves towards deregulation and privatisation help bolster the overall score, but
Israel will probably remain out of reach.

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2008 saw oil and gas export growth in value terms peaking with 53.1% growth compared to 2007, up from
7.1% growth in 2007 and 11.1% in 2006. 2008’s oil export growth was the highest since the peak growth of
69.5% in 2000. Oil and gas export growth had been accelerating since Q2 2007 and reached a peak in Q3 2008
at 85.4% compared to the same period in the previous year. Q4 2008 saw this run of accelerating growth come
to an end as oil and gas export values decreased 21.3% compared to Q3 2008, lowering the year on year growth
of Q4 2008 to 32.7%. This was the result of the price drop from an average price in Q3 2008 of US$ 126.80 per
barrel to US$ 92.60 per barrel In Q4 2008, although the effect of the price drop on export values was softened
by the higher oil production in Q4 compared to Q3 2008. The drop in oil and gas export values at the end of
2008 should not hide the fact that Q4 2008 was the quarter with the second highest value of exports in Oman’s
history and 2008 was the record highest year for generating oil and gas export income.

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