Oman’s Hydrocarbon Finder E&P (HCF) has signed a $50m Islamic structured finance with local Bank Nizwa.

HCF signed an exploration and production sharing agreement (EPSA) to exploit onshore Block 7 under a concession agreement with the Omani government in late January.

The independent oil and gas exploration company is majority-owned local conglomerate Services & Trade (S&T) Group. Dubai’s Alpen Capital were the advisors to S&T on the finance deal.

This is Bank Nizwa’s first major oil and gas sector deal, despite oil prices being about 70 per cent lower than they were two years ago.

HCF is taking over the 2331 kilometre-square Block 7 in al-Wusta Governorate from local Petrogas. HCF aims to increase production to 5,000 barrels a day from 950 currently. It plans to drill 10 exploration wells over the next five years.

Current costs per barrel from the block are in the $30s, which HCF are trying to reduce.

Resource-based lending for oil & gas is rare in the Middle East, where most producers are very large national or international oil companies.