Oman inks pact with Total, Petrogas for developing oil blocks
Oman government on Thursday signed one each production sharing agreement with Total Exploration and Production Oman Petroleum B V and Petrogas Kahil LLC 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 (which has water depths ranging from 30 to 3,000 metres), while pact with Petrogas was for onshore block 55, spread in an area of 7,564 square kilometres.
The exploration programme for block 41 is expected to begin with seabed coring in 2014.
As per the agreement, both companies will conduct geological and geophysical studies upon which exploration wells will be proposed for drilling during the exploration period.
The contract signed with Total has two phases and in the first phase the company will conduct surveys and exploration activities for one year, which will be followed by the second phase where in the oil giant will drill a test well. The total investment envisaged for both phases will be around $133 million.
The second agreement with Petrogas Kahil is also divided into two stages. The first stage includes the seismic surveys and some associated works alongside with digging four wells in the first four years.
The total cost of the surveys, which cover about 1,550 km and the re-evaluation of about 3,000 km, is $39 million. Based on the outcomes of the first stage, the company will move to the next stage, which includes digging four wells over two years. The total investments at the two stages are estimated at $45 million.
The two agreements were signed by Dr Mohammed bin Hamad Al Rumhy, Minister of Oil and Gas with Arnaud Breuillac, President, Middle East at Total Exploration and Production and Usama Mohammed Ali Al Barwani, Director, Business Development of MB Holding Company – which owns Petrogas.
Talking to media after the signing ceremony, Breuillac said the block has sizable crude reserves in place and Total has developed cutting edge technology for such deepwater oil blocks.
"We are first trying to identify evidence of oil through seabed quarrying. If we are successful, we will mobile (resources) for drilling a well," he further added.
"This acquisition is aligned with Total's ambitious exploration strategy focused on frontier basins and new places with strong potential. For Total, this new entry into the ultra deep offshore waters of Oman bolsters other recent additions to our exploration portfolio. We are pleased to be able to harness our deep offshore expertise to work for the Sultanate, with whom we have shared a common history since 1937," added Breuillac.
In Oman, Total Exploration and Production produced 37,000 barrels of oil equivalent per day in 2012.
The group produces oil primarily from block 6 (four per cent) as well as block 53 (two per cent). Also, Total produces liquefied natural gas through its stake in Oman LNG (5.54 per cent)/Qalhat LNG 2.04 per cent) liquefaction plant, which has a capacity of 10.5 million tones per annum.
Breuillac also said that Total is going to produce more than 2.3 million barrels of oil equivalent per day in 2013 and the Middle East region represents 23 per cent of total production.