Oman eyes 2010 crude output hike; PDO pumps less

MUSCAT (Reuters) - Oman aims to boost crude output for the third year in a row in 2010, a top official said on Monday, even after its largest producer, PDO, saw output fall in 2009.

Oman is a small, independent producer, but has an influence on the price of more than 10 times more crude than it produces. Oman's oil is part of a benchmark price used to value around 10 million barrels per day (bpd) of crude exports from the Middle East to Asia.

The country plans to boost output to an average of 860,000 barrels per day in 2010, said State Undersecretary for Oil and Gas Nasser al-Jashmi at a press conference in Oman.

That would be up nearly 6 percent from output of 812,500 bpd in 2009 and would mark the third consecutive year of increased crude output from Oman.

The sultanate has spent heavily to reverse output decline from its aging fields. Output peaked in 2001 at 956,000 bpd before declining every year through 2007.

The country's largest oil producer, state-controlled Petroleum Development Oman, pumped less crude in 2009 than the previous year even as the country's total output rose by 7.4 percent.

PDO, an affiliate of Royal Dutch Shell (RDSa.L), pumped 552,000 barrels per day of crude in 2009, the company said in a statement on Monday. That was down from the 566,000 bpd crude output the company reported for 2008.

PDO pumps just under 70 percent of Oman's crude output and sees little change in its production targets over the next few years, said Managing Director John Malcolm.

"We will continue with the target of 540,000 bpd to 560,000 bpd for the next few years," Malcolm said. That was steady from the previous two years.

Still, PDO's total oil output, which includes condensates and liquefied petroleum gas (LPG), rose to 641,000 bpd in 2009 from 633,000 bpd the year before.

PDO made four oil discoveries last year that could eventually add up to 1 billion barrels of recoverable reserves in Oman over the next 10-15 years, Malcolm said. Oman had reserves of 5.6 billion barrels of oil at the end of 2008, according to BP's statistical review.

Malcolm declined to say when the new discoveries might start producing oil.

Oman aims to award 11 oil exploration and production deals in 2010, up from four last year, as part of efforts to boost long-term output, Jashmi said.

Oman has struggled to meet rapid domestic gas demand growth. It has prioritized meeting local demand over meeting exports, leaving it with spare capacity at its liquefied natural gas (LNG) terminal. There, Oman is only meeting its contract commitments and is offering nothing more to LNG buyers.

"Our priority is to cater for domestic demand in gas," said Jashmi. "Our LNG exports will stay the same level as now for the next few years."

The following is Oman's 2010 target and total oil production (crude and condensates) in bpd since 1999, according to official data:

(Reporting by Saleh al-Shaibany; Writing by Simon Webb; Editing by Keiron Henderson)