ILIC is in talks with several regional institutions to underwrite the Islamically structured facility. The funds will provide the initial investment required for the $200 million project, which entails drilling some 80 wells and implementing extensive water injection programmes over the next four years to increase production capacity to 25,000 barrels a day (b/d) of oil from 5,000 b/d. MB Petroleum say no further financing will be required to fund the remaining project costs.

Itochu, which already lifts 25,000 b/d of Omani crude, has agreed to take 50 per cent of the concession’s output, with the remaining production for export to China by CNPC. Block-5 has estimated recoverable reserves of 120 million barrels of oil. Granherne & Companyof the US and the UK-based Petroleum Geo Services are acting as project consultants to the lenders (see also Oil & Gas).