Petroleum Development Oman (PDO) has signed a US$1.2 billion contract to supply piping for its drilling operations through Duqm.

The five-year deal with Japanese supplier Sumitomo further includes a new supply yard in the Duqm Special Economic Zone which will be a logistics centre for materials being delivered to PDO’s drilling locations.

The agreement will confirm PDO as an anchor tenant at Duqm from mid 2018, with up to two shipments a week (carrying 3,000 metric tonnes of pipe) being routed through the port for its oil and gas fields.

The logistics hub will provide integrated supply chain management services – such as storage, planning and delivery – and 30 trucks a day will be needed to transfer the pipes from the new supply yard to PDO’s drilling locations.

The move will significantly build capability at Duqm to become the primary logistics hub for the Sultanate’s oil and gas sector and complements the Tanfeedh programme on economic diversification.

PDO Managing Director Raoul Restucci said: “This contract will spur the growth of Duqm and attract even more business as the port demonstrates its ability to handle major operations.

“Every year, we drill 600 wells across our concession area and all the piping for that will be managed at Duqm.

“This agreement is further evidence that PDO’s In-Country Value (ICV) programme to retain more of the oil and gas industry’s wealth in the Sultanate by creating Omani jobs and developing local capability and infrastructure is going from strength to strength.

“At the same time, it underlines our commitment to turn the promise of Tanfeedh programme on economic diversification into concrete action.”

The new agreement is a renewal of an existing contract to supply PDO oil tubular goods, casing and tubing pipes used for drilling, and consolidates the Company’s long-standing business relationship with Sumitomo.

The deal builds on the Government’s strategic aim to make Duqm the oil and gas port for Oman and will further attract other companies’ services to the hub. Its proximity to Oman’s major oil fields and its links to a congestion-free road network will enable PDO to reduce road safety exposure and achieve cost reductions.

Mr Restucci said: “Duqm meets a strategic need for Oman, both in terms of its location and facilities. For PDO and our contractors, its proximity to some of our major fields is a great boon as it enables us to import and move vital equipment and material faster and cheaper than routing cargoes through other locations.

“This new approach will save time and money while at the same time aiding the development, capability and capacity of a vital logistical hub for the Sultanate, complementing the well- established ports of Sohar and Salalah.”

About PDO

Petroleum Development Oman (PDO) is the major exploration and production company in the Sultanate. It accounts for about 70% of the country’s crude-oil production and nearly all of its natural-gas supply. The Company is owned by the Government of Oman (which has a 60% interest), the Shell Group (which has a 34% interest), Total (which has a 4% interest) and Partex (which has a 2% interest). Gas fields and processing plants are operated by PDO exclusively on behalf of the Government.

Source: www.pdo.co.om