Indago takes its name from the Latin verb to search. And it has discovered a potentially rich seam. An offshoot of the break-up of Australia’s Novus Petroleum, Indago’s legacy and focus is on a small Gulf outpost taking in Ras al-Khaimah and the waters off eastern Oman.

Novus was subject to a hostile but successful takeover in 2003 by Indonesia’s Medco. However, it subsequently became clear that the Asian firm’s interest was predominantly in the local assets it secured from the deal. Medco divested itself of other holdings – in Australia, to the local Santos, and in Oman to a company freshly formed by shareholders in Novus, among them British founder Bob Williams and London-based private equity firm Meridian.

The bedrock of Indago’s operations lies in the Bukha field, off the Musandam peninsula. ‘We started with some small non-performing assets in the Straits of Hormuz,’ says Williams. ‘At the time, no one believed in gas because there was no market.’ Reflecting this state of affairs, output from the field was supplied to Ras al-Khaimah Cement Company for free, while Novus made money from the associated condensates. Indago is also active within Ras al-Khaimah, where it operates all the onshore gas concessions.

Times have changed. A heads of agreement (HoA) was signed in February for the supply of further gas to Ras al-Khaimah, this time commercially, chiefly to fuel the booming local cement sector. ‘Putting in place a formal gas sales agreement is unlikely to be a big issue,’ says Williams.

The new gas will be supplied from the West Bukha field – an area with an eventful past, lying on the median between Oman and Iran. The Iranians refer to the field as Henjan. For many years, efforts were made to develop the field jointly. But in 2000, Tehran broke off negotiations. ‘Muscat took the view that they wanted and needed the gas and that they had given the Iranians plenty of time to reach an agreement,’ says Williams. ‘So they appointed Novus as operator of West Bukha.’ The firm’s partners are South Korea’s LG International, Canada’s Heritage Oil Corporation and the government of Oman. Financing has now been raised for the commercial development of the concession and a contract award is awaited on the front-end engineering and design (FEED) and detailed engineering for an unmanned wellhead platform. It had been hoped to drill the first well by the end of the year but global rig shortages and a consequent explosion in prices has forced a delay until early next year. First gas is due in 2007.

‘Four wells have been drilled in the field but they date back to before the 1979 [Iranian] revolution, so there is little knowledge as to whether the field contains 100 bcf [billion cubic feet] of reserves or 2 tcf [trillion cubic feet],’ says Williams. ‘Our best estimate is about 800 bcf, of which 30-40 per cent is on the Omani side.’

Indago is looking toexpand its reach, albeit within a narrow range. In September, the firm acquired block 30, adjacent to block 47 which it already operates, from the US’ Anadarko Petroleum Corporation. The rationale was a combination of economies of scale and Indago’s historical expertise in obtaining gas from similar geological structures in the area. ‘The concession contains four small fields which were not commercially viable individually, particularly for a company of Anadarko’s size,’ says Williams. Negotiations are under way on further potential acquisitions in the sultanate.

To enable expansion, the company, independently valued at about $350 million, is planning a share offering and a listing on London’s Alternative Investment Market (AIM). But the goal of its quest will remain unchanged. ‘We are totally focused on Oman and the UAE,’ says Williams. ‘We like both the economics and the political climate.’

CD