Oman to up oil output to 830,000 bpd by end-2009

DEHRADUN, India, May 30 (Reuters) - Oman will raise its crude oil production to up to 830,000 barrels per day by the end of this year, oil minister Mohammed bin Hamad Al-Rumhy said on Saturday.

Oman's production grew 47,000 bpd in 2008 to 757,000 bpd, but was still down from the peak output of 956,000 bpd in 2001. In January, Rumhy had said the Gulf Arab state planned to boost its output to 805,000 bpd this year.

"The exit production by the end of this year will be 820,000-830,000 bpd but average will be 800,000 bpd for the entire year," he told reporters at an industry event.

The main reason for higher output by the end of this year would be increased oil output from Occidental Petroleum Corp's Mukhaizna oil field, Al-Rumhy said.

The field would produce 75,000 bpd by December from the current 60,000 bpd, he said, adding that it would reach peak production of 150,000 bpd by 2012.

Al-Rumhy said OPEC's recent decision not to change oil output was a "good one" and crude oil prices at $55-$70 a barrel were "reasonable".

"Low oil prices discourage investment that create problems for future. Luckily, we had a very short period of low oil prices of $30-$40 a barrel ... We were rethinking on some enhanced oil recovery projects but now we see prices looking up. The projects are on stream," Al-Rumhy said.

He said Oman's crude oil production from two to three of its enhanced oil recovery projects was expected to rise by 100,000 bpd in three years as strengthening global crude oil prices have justified investment in these projects.

Oman has spent heavily on a variety of long-term programmes to enhance oil recovery from ageing fields. The efforts appear to have begun paying off with Omani output rising last year for the first time since peaking in 2001.