Highest Quality Standards
OER reviews what makes Omani crude oil so competitive in the international market

1967 - On July 27, the Mosprince – a 83,000-tonne tanker built only the previous year in Japan for the Mosvold Shipping Company of Norway – arrived off the coast of the Sultanate of Oman to load a cargo of crude oil. According to the bill of lading dated August 8, 1967, the cargo consisted of 543,800 barrels of net clean oil of API* gravity 33.2 degrees, valued at US$1.42 a barrel. Distinguishing that oil was not its volume, purity, density or price, but its provenance, for it was the first oil ever exported from Oman.

Four decades have passed since. Omani crude oil continues to command great demand in the international market (see graph – Oman Crude Export Destinations 2006). But it has not always been easy to meet the demand particularly in recent years. John Malcolm, PDO managing director, explains: “We produce from 3,750 wells in 120 fields, operate 16,000 km of pipelines and run numerous oil-processing plants. Last year, we contracted 36 drilling rigs to sink 249 wells. That is more new wells drilled than by any other Middle East national oil company. And there are literally many more layers of complexity under the surface: Oman’s geology is exceptionally complex.”

Production process
Oil is forced to the surface using the natural pressures underground, through pumps on the surface or submerged in the well, and also by injecting water or gas to artificially increase pressure in the reservoir. Often what comes to the surface is a mixture of oil, water and gas, and this is collected and separated in oil production stations. The water is either used for re-injection into the field or disposed of, while the gas is a valuable commodity in its own right, and is mostly transported away for sale unless it is needed for injection into the reservoir. Once the water and gas have been removed, the remaining crude oil is pumped from the production station into pipelines for transportation and commingling in the main oil line. The main oil line is the backbone of Oman’s oil production, stretching 1,600 km from Marmul in the south to Muscat in the north. The resulting mixture – known as Oman Export Blend Crude – is collected at PDO’s Mina al Fahal terminal. The terminal has 10 storage tanks with a capacity of nearly five million barrels and three single-buoy mooring units, through which the tankers receive their liquid cargo.

Mina al Fahal bay is one of the region’s few deepwater ports for oil tankers, so the ships usually arrive partly filled, then top up with Omani crude before setting off for their final destinations. The remainder of Oman’s oil meets the needs of the domestic market, for which its final destination are the refineries at Mina Al Fahal or Sohar. At the refinery, crude oil is turned into gasoline and fuel oil. Refined oil is also used as the base material for plastics and chemicals. Nothing is wasted – even the heavy residue from refining is used as bitumen, which gives a solid foundation to the roads we drive on.

Quality standards
The Omani government’s policy is to ensure that the oil has a minimum average API of 34 degrees. In addition, before the oil is loaded onto tankers, it must meet certain other technical specifications with respect to its acidity and its water, salt and sulphur content. Crude oil is commercially defined as “sweet”, if the total sulphur content is 0.5 per cent or less by weight and “sour**” if this is more. Oman crude is classified as sour oil.

PDO and the other oil producers in Oman, all of whom put their oil into PDO’s main oil line, ensure that their contributions meet agreed quality specifications. The quality and quantity at each input mode is measured and the data are transmitted in “real time” to PDO.


*API gravity: An arbitrary scale of degrees, named after the American Petroleum Institute, by which a crude oil’s specific gravity (its density relative to water) is measured. The larger the API degree, the lighter the oil and the higher its value.

**Sour Crude: Crude oil containing more than 2.5 per cent sulphur (by weight).
 

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