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Government plans to award two oil blocks for exploration to international firms this year


Salim bin Nasser Al Aufi, Undersecretary at the Ministry of Oil and Gas.— Photo Jun Estrada/Times of Oman

Muscat: Oman government plans to award two oil blocks to international firms for exploration in Southern Oman this year, which is part of five blocks tendered last year.

The Ministry of Oil and Gas is on the verge of finalising negotiations with foreign companies, said a senior official of the Ministry of Oil and Gas, on the sidelines of the International Unconventional Gas Conference and Exhibition here yesterday.

"We continuously offer open blocks to the market," said Salim bin Nasser Al Aufi, Undersecretary at the Ministry of Oil and Gas.

"We have already finished negotiations for five oil blocks," added Dr Saleh A Al Anboori, Director General of Management of Petroleum Investment at the Ministry of Oil and Gas.

Oman government last month signed one each production sharing agreement with Total Exploration and Production Oman Petroleum B V and Petrogas Kahil for developing an offshore oil block in northern coast and an onshore block in Al Wusta region, respectively.

The first agreement with Total was for developing offshore block 41 spread in a large 23,850 square kilometre area off northern coast, while pact with Petrogas was for onshore block 55, spread in an area of 7,564 square kilometres.

As many as twenty-two multinational firms are currently exploring for — and in some cases producing – oil in almost 25 concession blocks in the Sultanate under production sharing agreements. Presently, multinational oil companies contribute 30 per cent of total crude production, while PDO constitutes the remaining 70 per cent oil output. As huge investment is required for bringing oil above the ground in view of the peculiar nature of reservoirs in Oman, the government has been encouraging multinational firms to undertake exploration on production sharing basis.

Meanwhile, David Dalton, Middle East Regional President of BP, said that the British oil company has already started procurement for developing the Khazzan tight gas field in north-central Oman with an envisaged investment of $16 billion. Oman government and the British company signed a gas sales and production sharing agreement last month.

Well drilling programme
Dalton said that the full-field well drilling programme has already been started. "We have one rig operating in the area now and we are bringing two more rigs. As and when they are operational, BP will be adding more wells," said Dalton, adding; "We hope to have around 50 wells completed by the time we commission the project in 2017." The full field development will involve a drilling programme of around 300 wells over 15 years to deliver plateau production of one billion cubic feet of gas per day and 25,000 barrels per day of gas condensate.

BP is signing agreements with key contractors for ramping up field development programme over the next few months. BP has 60 per cent stake in block 61 and Oman Oil holds the rest 40 per cent.

Apart from Salim bin Nasser bin Said Al Aufi, Raoul Restucci, Managing Director of Petroleum Development Oman, Menahi Al Anzi, Deputy CEO – Exploration and Gas, Kuwait Oil Company David Dalton and Jerome Ferrier, President of International Gas Union, have addressed the International Unconventional Gas Conference here yesterday.

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