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Wed 3 Aug 2011 07:09 PM

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Oman awards deal for MidEast’s first solar oil-recovery site

Seven megawatt site will deploy enhanced oil recovery technology, injecting steam into oilfields

Oman awards deal for MidEast’s first solar oil-recovery site
(Photo for illustrative purposes only)

Petroleum
Development Oman, a third owned by Royal Dutch Shell, has awarded a
contract to GlassPoint Solar to build the Middle East’s first solar
plant generating steam to boost output from aging oil deposits.

The
7-megawatt, four-acre site will deploy enhanced oil recovery, or EOR,
technology, injecting steam into oilfields to loosen denser crude,
according to a statement from Fremont, California-based
GlassPoint. Previous such operations have burned natural gas to produce
the steam.

Gulf
nations, suppliers of about a quarter of the world’s oil, are
introducing EOR technology to make the most of depleting reserves.

Oman,
the biggest Arab oil producer that isn’t a member of the Organisation
of Petroleum Exporting Countries, has reversed output declines as the
country leads the region in its use of the system.

“Over time,
the light oil at the top of fields gets used up, so ultimately everyone
will be producing heavier and heavier oil,” GlassPoint CEO Rod Macgregor said on Wednesday in a telephone interview.

“Oil
producers will need steam from somewhere, so they can either burn gas,
which many lack, or they can use solar energy.”

Saudi
Arabia, the biggest crude exporter, will probably use EOR technology for
more than 1 million barrels a day of its output by 2030, according to
the US Energy Information Administration’s World Energy Outlook.

Chevron Corp uses steam to produce oil from part of the Wafra field
that Kuwait shares with Saudi Arabia. Kuwait, OPEC’s fourth-largest
member, plans to produce 60,000 barrels a day of heavy oil by 2016.

While
GlassPoint’s plant will reduce Oman’s use of gas by only 1.6 million
cubic metres a year, barely denting the 5.4 billion cubic meters it
employs for EOR, “there’s no reason you couldn’t displace 80 percent of
it,” Macgregor said.

Oman is
reducing exports of liquefied natural gas and has delayed building
petrochemicals plants as it feeds the needs of its own oil production
and power plants. The country plans to produce 850,000 barrels of oil a
day this year, rising to 1 million barrels a day in the next five years,
Oil Minister Mohammed al-Rumhy said in November.

Saudi
Arabia, with the world’s largest crude reserves according to BP Plc,
also needs to use gas to fire its power plants as energy demand soars,
and is seeking alternative ways to boost oil extraction. Both Saudi
Arabia and the United Arab Emirates are considering employing carbon
dioxide for EOR.

Saudi Aramco
plans to start injecting CO2 into its Ghawar oilfield, the world’s
largest, by 2013, it said in February.

The UAE’s Abu Dhabi National
Oil Company successfully piloted a project using 60 metric tons of CO2 a day
at the Rumaitha field and is studying an expansion, according to CO2
EOR Strategy Advisor Ghaniya Bin-Dhaaer al-Yafei.

“The main
EOR worldwide is steam with heavy oil, so demand for this solar
technology depends on the heavy-oil reserves of big oil producers,” said
Nansen Saleri, CEO of Quantum Reservoir Impact LLC, a Houston-based
adviser to oil companies.

“Saudi Arabia or Kuwait’s heavy oil is a very
small part of their production, while steam injection is all over
Venezuela because about 70 percent of its oil is heavy.”

The
Sultanate of Oman is Petroleum Development Oman’s largest shareholder
with a 60 percent stake, while Royal Dutch Shell owns 34 percent, Total
SA holds 4 percent and Partex Oil & Gas has 2 percent.

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