Oman’s Ministry of Energy & Minerals (MEMR) has signed an exploration and production sharing agreement with OQ Exploration and Production (OQEP) and state-owned Turkiye Petroller AO (TPAO), granting them exclusive rights for exploration, appraisal, development, and production of oil and gas within the Block 80 offshore concession area.

Block 80 covers approximately 5,737 square kilometres (sq km) in Oman’s Gulf waters, near the Strait of Hormuz, and off the coast of Musandam governorate. The block encompasses the already producing Bukha and West Bukha oil and gas fields, which provide foundational geological data.

OQEP – the upstream business of Omani state energy conglomerate OQ Group – and TPAO signed a separate joint operating agreement for Block 80, through which their wholly-owned subsidiaries, OQ Exploration and Production Musandam Offshore and Turkish Petroleum Overseas Company Limited (TPOC) will hold 50% interests each in the concession, with the Omani entity being the operator.

The exploration and production sharing agreement with MEMR for Block 80 stipulates a minimum exploration investment commitment of $90m over an initial eight-year exploration period for the joint venture partners.

The work programme is divided into two phases aimed at further evaluating and unlocking the block’s hydrocarbon potential.

During the first exploration phase, which spans four years, the consortium will undertake 500 square kilometres of 3D seismic surveys, drill two exploration wells, and complete one appraisal well, with mandatory investments estimated at not less than $60m.

The second phase, also lasting four years, includes the drilling of an additional exploration or appraisal well, depending on the results of the initial exploration activities, with a minimum investment commitment of $30m.

If the joint venture partners are able to ascertain commercial viability during the exploration period, MEMR could extended the production period for the concession of up to 30 years.

OQEP and TPAO signed a third agreement with Omani state-owned Integrated Gas Company (IGC) for sale of gas potentially produced from Block 80 in future.

“The project is expected to leverage advanced seismic imaging technologies and offshore drilling techniques to evaluate prospective hydrocarbon resources and identify new commercial discoveries that can support Oman’s long-term production sustainability and energy sector growth,” the partners said in a statement.

According to MEMR, “Block 80 benefits from its location within a highly prospective offshore basin and from geological data accumulated through previous exploration and production activities in neighboring offshore areas. The presence of the producing Bukha and West Bukha fields further enhances the potential for additional hydrocarbon discoveries.”

Omani upstream company

The portfolio of OQEP, in which Oman’s state energy conglomerate OQ Group owns the majority 75% stake, comprises 14 upstream oil and gas exploration and production assets in Oman and includes onshore and offshore operations, as well as assets under service contracts.

Formerly known as Oman Oil Company Exploration & Production, the company’s flagship assets are Block 60, which includes the Abu Tubul and Bisat oil fields, and Block 48.

OQEP also holds strategic stakes in key gas-producing assets including blocks 9, 10 and 61. In February this year, the company expanded its portfolio by acquiring a 30% interest in offshore Block 18.

Situated off the northeastern coast of the sultanate, Block 18 covers more than 21,000 square kilometres in the Sea of Oman, in water depths ranging from 50 metres to 3,000 metres. The block is considered one of the leading offshore areas, with diverse geological potential, despite the technical challenges associated with exploration and drilling in deep waters, as no confirmed discoveries have previously been made in the block. 

MEMR awarded exploration rights to Block 18 to a joint venture of OQEP’s subsidiary OQ Exploration & Production Al-Batinah Offshore and PC Oman Ventures, a wholly-owned subsidiary of Malaysian state energy company Petronas.

Under the terms of the agreement, Petronas will assume operatorship with a 70% participating interest, while OQEP will hold the remaining 30% stake in the concession rights. 

Additionally, OQEP completed the acquisition of a 35% interest in onshore Block 27 in April from the wholly-owned Middle East subsidiary of Japan’s Mitsui E&P, with the transaction valued at RO28.8m ($75m).

The asset sale and purchase agreement with Mitsui E&P Middle East covers the non-operated participating interests in Block 27, with an economic effective date of 1 January, 2025.

Block 27 is a producing oil and gas concession located in the sultanate, operated by US-based Occidental Petroleum, which holds a 65% participating interest in the block as part of an exploration and production sharing agreement, valid until 2035.

OQEP expects net additional production of about 3,500 barrels of oil equivalent a day (boe/d) this year from its stake in Block 27.

Financial results in Q1 2026

Despite a 16% year-on-year drop in crude oil prices in the first quarter of 2026, Muscat Stock Exchange-listed OQEP said it was able to maintain profitability “through increased sales volumes and disciplined cost management”.

The company generated a net profit of RO71.9m ($186.8m) on revenues of RO296.4m ($770.87m).

Earnings before interest, taxes, depreciation and amortisation (Ebitda) stood at RO226.7m, maintaining a strong margin of 76.5%. Cash reserves grew by 40% to RO167m, while net debt fell 18% to RO216.3m.

OQEP recorded capital expenditure of over RO62m ($161m) in the first quarter, marking a 9% year-on-year increase driven by increased drilling.

Total hydrocarbons production reached 224,000 boe/d in Q1 2026, while oil sales volumes increased by 21%, and gas sales volumes rose by 17% compared to the same period in 2025.

Upstream service contracts

In May, OQEP awarded contracts related to key upstream oil and gas services at its main hydrocarbons blocks, 60 and 48, to local firms.

OQEP, in which Oman’s state energy conglomerate OQ Group owns the majority 75% stake, awarded the following four contracts:

• Abraj Energy – cementing pumping services for five years
• Nizwa Energy – conductor casing driving services
• Heavy Equipment Maintenance & Trading – wellhead production tree and associated services
• Nafun – conductor casing driving services

OQEP said the agreements had been signed with small and medium-sized enterprises (SMEs) “to support key operational and drilling activities across blocks 60 and 48”.

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