Majid Jafar Discusses Oil Prices and More

While interviewed during the World Economic Forum in Southern Shuneh, Jordan, at a resort at the Dead Sea, Majid Jafar shares some of his perspective. Majid Jafar, CEO of Crescent Petroleum, discusses how low oil prices have forced Middle Eastern producers to focus on efficiency.

In the post Saddam Hussein era, Jafar answers a number of questions from the reporter. These questions include looking at who is the big winner and loser for oil prices and looking at the outlook for Saudi Arabia.

Hear the entire transcript and get up to date information on oil prices.

PDO Director Restucci Announces New Oil Fields in Oman

Raoul Restucci

Raoul Restucci, the managing director of Petroleum Development Oman (PDO) announced at his company’s annual media briefing last week that PDO has discovered several new sources for oil and gas in Oman, in addition to those already reported in 2011.

Two areas within the northeast sector of PDO’s concession area, in Lekhwair, were discovered; Lekwhair-724 and Mazkhour-5. Restuccci said that early test results predict that these wells should be able to supply more than 2,600 barrels of oil per day.

"In the south of Oman, PDO exploration well Sakhiya-21 discovered oil in an intra-salt Ara stringer carbonate reservoir near the Harweel production station. The well sustained an oil flow of over 1,800 bpd during the production test. The eventual recoverable volumes from the field, including the use of miscible gas injection as a secondary recovery scheme, are expected to be over 35 million barrels of oil," he said.

"Overall, these discoveries of both oil and gas come from a variety of reservoirs and depths, demonstrating the significant potential that continues to be available in the PDO concession area. As a result, PDO will continue its extensive efforts to find both new oil and new gas fields," Restucci stated.

In other good news for PDO, the company also had its best year in safety statistics. Total Recordable Case Frequency (TRCF) is at an all-time high with more than 450 million kilometers without even one work related road accident fatality. In addition, PDO signed a $35 million five year contract with Al Haditha Oilfield Services Company, which agrees to provide necessary flowline replacement services.

Restucci said that the value of the contract which was signed last week also increases with the scope of the work which Al Haditha can cover. The contract with Al Haditha, Restucci added, is part of their “In Country Value” strategy, which strives to support SLCC companies as well as grow and develop services and products created by Omani-based companies.

What If the Oil Stops Flowing from Oman Too?

China Imports Oil From Oman

As tensions in the Middle East continue to rise, concern about the political stability in Oman is mounting. Unrest in the sultanate has not yet reached the levels seen in countries such as Libya or even Bahrain, with only 2 deaths which can be attributed to clashes between demonstrators and security forces, but there are fears that the situation in Oman will worsen.

China and Asia Worried

The majority of oil exports from the Middle East go to China and Asia who are especially worried that Oman will join in the general grassroots uprising spreading like wildfire throughout northern Africa and the Middle East, breeding fear in the east that the supply of oil from Oman may be disrupted.

Oman is not a member of OPEC (Organization of Petroleum Exporting Countries) but it does have the largest supply of oil reserves of any country in the Middle East which is not a member. In 2010 Oman produced 863,000 barrels per day of total petroleum liquids, almost all of which was crude oil. Over the past three years oil production there has increase by more than 20%.

Can Saudi Arabia Fill In for Libya?

At the moment there is nothing but uncertainty about how much the flow of oil from Libya will be disrupted due to the war raging there. Saudi Arabia has said that it can increase output to cover the Libyan deficit of oil deliveries, but to what extent it can do this is a big question.

West Looking East with Concern

The main importers for the oil from the Middle East and North Africa are Asia and China, who are watching the developments in the region with growing concern. Most likely, if the situation worsens and oil supplies are severely disrupted, China and Asia will turn to Mexico for their oil, leaving countries such as the US, Great Britain and Europe to fend for themselves.