Oman awards operating stakes in two key hydrocarbon blocks

18 December 2018
Block 51 awarded to Oxy Oman and Block 65 goes to JV of Oxy and Oman’s OOCEP

Muscat has awarded US energy producer Occidental Petroleum’s (Oxy) Omani subsidiary an operating stake in two key onshore hydrocarbon blocks in the Sultanate, according to a local media report.

As per the Exploration and Production Sharing Agreements (EPSA) for the two blocks, Oxy Oman acquires a 100 per cent interest in Block 51, covering 10,133 square kilometres (sq km) in the northeast of the country, reported the Oman Daily Observer.

Separately, a joint venture (JV) of Oxy Oman and the state-owned Oman Oil Company Exploration & Production (OOCEP) has been awarded Block 65, a smaller 1,230 sq km concession.

The two blocks will attract a combined investment of around $65m from the operators over the next six years, according to a senior official at Oman’s Ministry of Oil & Gas, who the newspaper quoted.

Oxy Oman and OOCEP have also had to commit $38m on the two blocks in the first phase towards seismic analysis of existing seismic data, the shooting of additional 3D seismic, and the drilling of exploratory wells.

“Hopefully, with the additional seismic acquisition and geological studies, they will be able to find more prospects that will allow them to drill a total number of 14 wells – five in Block 51 and nine in Block 65 – over the two phases,” the official was quoted as saying.

The two blocks contain prospects for both conventional and unconventional resources and were among acreage offered for investment by Oman in its 2017 licensing round.

As part of its commitments towards Block 51, Oxy Oman will undertake geological studies to analyse existing seismic data and drill two exploratory wells as part of an estimated $6m investment in the first phase.

In the second phase, the company has committed a further $14m to, among other things, acquire 400 sq km of 3D seismic, and drill three additional oil and gas wells.

Block 65, awarded to the JV of Oxy Oman (73 per cent) and OOCEP (27 per cent) — will be operated by the former, although the agreement includes a provision for the latter to have a role as joint operator too.

OOCEP’s participation in the JV, according to the ministry official, follows a two-year study of Block 65 during which the state-owned E&P firm also committed to drill a well targeting unconventional resources.

According to the ministry, there are two plays within this block: the first is a conventional oil and gas within the Natih and Shuaiba formations. The second play is the Natih E unconventional oil play.

Wells drilled in the concession include the Karam-1, which uncovered a significant find in Natih Formation (Natih A/B), while the Al Shreega-1 well encountered a thin oil column in the Natih A. Oil shows were observed in the UER, Natih and Shuaiba formations.

On the other hand, Swedish energy firm Tethys Oil has announced the launch of a seismic campaign at Block 49 located in southwestern Oman, which it operates.

The announcement of the seismic campaign by Tethys is part of its three-year work programme for block 49 for the purpose of helping unlock the hydrocarbon potential of the 15,439 sq km concession, situated around the Rub al-Khali desert.

According to a statement issued by the Stockholm-headquartered E&P company, a total of 250 sq km of 3D and 315km of 2D seismic data will be acquired in the northeastern part of the license.

The objective, it said, is to define possible oil traps, as well as enhance the company’s understanding of deeper parts of the acreage.

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