Proud toServe Oman

FACT FILE2016FACT FILE2016

Petroleum Development Oman (PDO) is the major exploration and production company in the Sultanate of Oman.

It accounts for around 70% of the country’s crude oil production and nearly all its natural gas supply. The Company is owned by the Government of Oman (60%), the Shell Group (34%), Total (4%), and Partex (2%). Gas fields and processing plants are operated by PDO exclusively on behalf of the Government.

PDO is at the forefront of technological innovation in the oil and gas sector in the Sultanate of Oman. It operates in some of the most complex and challenging oil and gas fields – and is among the world leaders in Enhanced Oil Recovery (EOR) techniques, pioneering the use of polymer, steam and miscible gas injection on a full-field scale.

1

60%Government

of Oman

34%Shell Group

4%Total

2%Partex

300.5million kilometres

driven in 2016

28Number of powergeneration units

178 ~10,000Number of active wells

6,540Road system (km)

Number of productionstations21

5.6 billionCapital

Expenditure

Quick Facts

Expenditure 2016

18,534Pipelines & flowlines (km)

Production Highlights In 2016

2

Number ofproducingoil fields

11Permanentcamps

US$ 1.8 billionUS$

OperatingExpenditure

3

• Oil production of 600,197 barrels per day (bpd), nearly 15,000 bpd over target

• Highest oil production since 2005• A new total oil, gas and condensate production record of

1.293 million barrels of oil equivalent per day (boepd)

Well and Reservoir Management• Commissioned three more Company-owned hoists bringing

the total to five• Increase in well interventions by 49%

Well Engineering Achievements• 644 oil and gas exploration and production wells drilled –

12% up on 2015• The cost per metre drilled fell 8% from 2015• Drilled a total of 1,473 km (206 km more than 2015)

Other Notable Successes• Carried out 585 rig moves covering 14,164 km• Ran 164 operating units• Used 135,000 metric tonnes of steel

2016 – Another Production Record Operations Excellence Highlights In 2016

Black Oil Condensate NA Gas

1,500

1,250

1,000

750

500

250

01967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021

2016 Production: 1.293 mln boe/d• Black oil: 600.2 kb/d• Condensate: 81.3 kb/d• Non-Associated Gas: 516.7 kboe/d• Associated Gas: 94.4 kboe/d

550 550 550 563 565 575 600 609

553 549566 570 571

589600

500

550

600

650

2010

2011

2012

2013

2014

2015

2016

2017

2010

2011

2012

2013

2014

2015

2016

2017

2010

2011

2012

2013

2014

2015

2016

2017

Oil P

rodu

ctio

n (k

bbls/

d)

TargetActual

94 94 92 96 87 96 77 77

95 94 9286

7883 81

50

75

100

Con

dens

ate

Prod

uctio

n (k

bbls/

d)

TargetActual

77 81 83 80 83 85 82 80

7174

7780

7781 80

60

75

90

NA

Gas

Pro

duct

ion

(mln

m3/

d)

TargetActual

4 5

• Cut the number of Tier-1 Asset Integrity-Process Safety incidents from 22 in 2014 to 8 in 2016

• New BLADE system generated a 30% rise in production of beam pumped wells

• A total of 3,380 staff participated in 70 engagement sessions during the annual Process Safety Day

• Responsible for overseeing shipment of around 330 million barrels of oil a year

• A new bunkhouse was inaugurated at the Jetty area

Cost Control and Lean Business Efficiency

• Reduced 2017 planned expenditure by US$1.5 billion

• More than US$400 million has been generated by Lean in terms of extra revenue, cost reduction or cost avoidance

• 160 Lean business improvement projects have been executed

• 1111 cost-saving, efficiency or productivity improvement ideas were identified

• 24 Contract Optimisation Reviews (CORs) were held that resulted in the identification of US$64mln cost savings for the year

• 5,000 PDO staff have been given Lean awareness training

• 375 staff have participated in Lean practitioner training

• 485 managers, team leaders and supervisors have been trained as Lean managers.

Mina Al Fahal Terminal, Muscat

6 7

Project Delivery Highlights In 2016

Engineering standards review leads to expected US$1 billion savings over five-year periodThe Rabab Harweel integrated project is the largest capital project in PDO with a reserve add of more than 500 million boe is on schedule. First steam is expected from the Miraah solar energy project in 2017.

The Miraah project in Amal will be a1,021 megawattsolar thermal facility

Three major projects - Yibal depletion compression phase 3, Ghaba North gas oil gravity drainage and Mabrouk phase-2 were delivered successfully.

The Yibal Khuff project is ahead of schedule and

moved into the construction phase in 2016. The first oil is projected for

2020.

8 9

Enhanced Oil Recovery (EOR) Highlights In 2016 Exploration And HydrocarbonMaturation Highlights In 2016

Reappraisal of EOR activities to

account for >25% of production by 2025

Harweel 2AB project started miscible gas injection, incremental oil to date reaching 10 million barrels

2016 saw the completion of the alkaline-surfactant-polymer flooding trial at Marmul. The pilot produced a positive outcome with 30% incremental oil recovery.

The Marmul Polymer PlantAcquisition of

8,456 km2 of 3D Wide Azimuth (WAz) seismic data in Block-6

Gas Initially In Place (GIIP)

76.7

Stock OilInitially In Place (STOIIP)

66.5 billionbarrels

exploration wells delivered

27

86.4 of contingent oil reserves booked

million barrels

Contingent gas bookings at

0.45 trillion cubic feettrillion

cubic feet (Tcf)

10 11

In-Country Value (ICV)Highlights in 2016

People And Staff DevelopmentHighlights in 2016

PDO In-Country Value Strategy: To secure long-term sustainable commercial benefits for the Sultanate by increasing the procurement of local goods and services through local community companies and SMEs, and improving the capacity and capability of Omani people and companies.

Created

7,787job opportunities for Omanis

bringing the total opportunities to 30,000 since 2011

Awarded contractsworth more than

US$5.03billion to nationally

registered firms

4,000Omanis currently working

with Super Local Community Contractors (SLCCs) and

Local Community Contractors (LCCs) in different disciplines

Celebrated the graduation of

600 Omanis from PDO-sponsored training to work in the oil and gas industry, making

it the largest batch in our National Objective programme

Value of work executed by LCCs and SLCCs was

US$336.4 million, a 23% increase

Company moved beyond its boundaries to create

2,300 jobs in the non-oil sectors of aviation,

fashion, hospitality and real estate

The US$1.2 billion contract with

Japanese firm confirms PDO as an anchor

tenant at Duqm port

8,789staff

6,772Omani

employees

The

hig

he

st number in our history The Omanisation

rate was 77%

100th PhD scholar

celebrated

More than 39,000 mandays invested to develop 5,800 employees through courses and sessions

A total of

332Omanis were hired

837 Omanis among 935 female staff

on 15-member Managing Director’s Committee Omani graduates

Omani women4 1,080

12 13

General Welfare Highlights In 2016 Other Social Investment Achievements

Supporting the Community

Achieved a 21% reduction in Lost Time Injury Frequency, down to

0.22 Lost Time Injuries per million manhours workedA new Journey Management Centre was established to track vehicles and driver behaviour on the road

62% drop in driving violations while monitoring 7,500 vehicles a day

Commuter bus service transported 8,000 passengers a monthProject Prism, to improve the welfare of the contractor community, has

surveyed around 28,000 workers from 172 companies

Signed an agreement to give defensive driving training to 400 school bus drivers.

Launched second wave of Baader staff volunteering project, supporting

17 Non-Governmental Organisations compared to 8 NGOs in 2015

PDO’s social enterprise Banat Oman project trained 50 more women, taking the total to 300

Signed 26 social investment agreements and pledged US$4.6 million social investment funding.

Upgrading and expansion of the Shaleem health centre into a 14-bed hospitalThe completion of Ghaba majlis in AdamThe opening of a new pottery workshop for the blind in MuscatThe launch of a palliative care programme in conjunction with the Oman Cancer AssociationSigned an MoU for the expansion of Thumrait hospital

Signed an MoU for the building of public majlises in Al Rusais, Izki and wilayat ThumraitThe provision of a library at the Centre for Teaching Quran Sciences in Samad A’shanThe donation of PDO’s mobile planetarium to the Oman Astronomical SocietyProvided sponsorship and technical support to clean a total 54 kilometres of loggerhead turtle nesting beaches on Masirah IslandSeveral blood donation campaigns were conducted with 600 units collected from PDO volunteers.

RO

14 15

Environmental Stewardship

• 22% reduction in number of oil spills per million tonnes of production

• Gas flaring volumes fell 38%, to12.86 tonnes flared per 1,000 tonnes of production from 20.85 in 2015

• PDO has officially endorsed the World Bank “Zero Routine Flaring” initiative

• 44% cut in greenhouse gas emissions.

Petroleum Development Oman

PetroleumDevelopmentOmanPDO PDOChannel

@pdo.oman

www.pdo.co.om

@PDO_OM

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Intisaar Al Kindy Exploration DirectorIbtisam Al Riyami People and Change Director

Ruqaiya Al Hinai Corporate Planning DirectorAmran Al Marhubi Technical Director

Abdul-Amir Al Ajmi External Affairs & Value Creation DirectorMohammed Al Rashdi Well Engineering DirectorAli Al Gheithy Petroleum Engineering Function DirectorSami Al Lawati Infrastructure DirectorAbdullah Al Shuely Engineering & Operations Director

Raoul Restucci Managing DirectorHaifa Al Khaifi Finance DirectorSuleiman Al Tobi Oil Director SouthSalim Al Sikaiti Gas DirectorKhamis Al Saadi Oil Director North

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