In July 1996 a steam-injection pilot project was initiated in the Qarn Alam field in Oman. The objective is to test the steam-enhanced gas-oil gravity drainage of the heavy oil remaining in the matrix of the fractured carbonate Shuaiba reservoir. This paper presents the results of reservoir simulations that were conducted to investigate design and future interpretation of the steam pilot. Different simulation techniques were applied to describe the complexity of thermal processes and multiphase flow in a densely fractured reservoir. Pilot performance and areal advance of the steam zone were investigated. The possibility of oil rim lowering, prior to injecting steam, and of injecting steam in two different local crests, were also investigated but rejected on the basis of simulation results. Finally, locations for steam injection wells and pilot observation wells are proposed and requirements for pilot monitoring deduced.