Occidental Petroleum (Oxy) expects outlays of $250 to $300 million this year as spending begins to ramp up on its 24.5 per cent share of the Dolphin Energy project to move natural gas from Qatar’s North Field to the UAE and Oman.

Oxy’s overall Dolphin cap-ex is expected to be $1 billion  over three years, on top of the $310m it invested in 2002 to buy from Dolphin the one-fourth stake formerly held by Enron.
This year’s outlays would be in addition to Oxy’s other planned cap-ex of $1.4 billion, flat with 2003, excluding $224m of lease buyouts and $320m of acquisitions last year.
The 260 km, 48-inch-diameter North Field pipeline and onshore facilities are expected to come on line in 2006 and ramp to full output in 2007. Oxy’s initial share of Dolphin production is expected to be 65,000 boe per day: 275,000m cu ft per day of gas and 20,000 bpd of liquids.
That would equal 11 per cent of Oxy’s expected 2004 output of 575,000 barrels of oil equivalent (boe) per day. Oxy expects to begin booking those reserves as of year-end 2003. “It’s a great project, with no real market risk,” Oxy president Dale Laurance told a CS First Boston gathering here.
Over Dolphin’s 25-year life, Oxy expects to produce 1.3 Tcf of gas and 85m bbl of liquids. But with only 2 billion cu ft per day of the North Field pipeline’s 3 billiob cu ft per day of capacity committed, Oxy and Dolphin partners Total and the UAE Offsets Group are seeking added gas markets.
In a separate Dolphin-related Oman development, deliveries of some 60,000m cu ft per day of Oxy gas are slated to begin in mid-year from Safah and other Block 9 fields in Oman to Fujairah in the UAE, via a new 24-inch diameter, 182-km Dolphin-owned pipeline from Al-Ain. That $65m project, built by India’s Dodsal, saw its first gas flows in late January and should be commissioned this quarter. It will supply at least 120,000m cu ft per day from Oxy and Oman Oil to the 656 MW power station and 100m gal/d desalination plant of Union Water & Electricity Co in Fujairah.
It is the first cross-border pipeline gas movement between Gulf Cooperation Council states. Oxy is now flaring gas from its 12,000 bpd of Oman oil production, for want of a commercial market.