State-run Petroleum Development Oman (PDO) is targeting savings of around $3 billion over a five-year period through cost optimisation, waste elimination and efficiency-driven initiatives, a top official said.

The savings are being accrued mainly as a result of a programme of contract optimisation reviews that PDO has undertaken in collaboration with its contracting and vendor community, Haifa al Khaifi, finance director, was quoted as saying in the Oman Observer report.

Speaking at a seminar hosted by Oman France Amitie (Oman-French Friendship Association), Haifa said the company had embraced LEAN business practices well before the crisis hit in 2014. Since then, it has adopted a far-reaching cost optimisation and waste elimination programme in line with its mantra, ‘Never Waste a Crisis’, she explained.

A key focus area for the company is to improve production in support of majority shareholder the Omani government’s economic objectives, said Haifa, noting that combined output of crude, gas and condensates presently averages 1.3 million barrels of oil equivalent per day (boepd).

“While early monetisation of new discoveries is one notable strategy that is helping PDO mitigate the effects of the downturn, another focuses on enhanced well and reservoir management,” Haifa said.

The efficacy of this programme is evident from the dramatic improvement in arresting the rate of decline to 4.8 per cent presently, down from a high of 12 per cent in 2012. This compares with a global average of 15 per cent, she said.