FOCUSED STRATEGY: We would like to pay more attention to local investment on the upstream front, says CEO –
Conrad Prabhu –
MUSCAT, NOV 15 –
Oman Oil Company (OOC), the Omani government’s energy investment arm, is moving aggressively to grow its presence in the upstream segment of the Sultanate’s oil & gas industry, complementing its already formidable footprint in the midstream and downstream sectors.
On Tuesday, a pair of joint ventures set up by OOC’s upstream subsidiary — Oil Company Exploration & Production LLC (OOCEP) — secured licenses from the Ministry of Oil & Gas for the development of two key concessions.
While the JV of Occidental of Oman and OOCEP scooped the licence for Block 30 onshore Oman, the JV of Italian energy firm Eni and OOCEP was awarded Block 52, a massive concession offshore the Sultanate’s southeastern and southern seaboard. Qatari national energy firm Qatar Petroleum has also signed an option for a 30 per cent interest in Block 52.
Commenting on the strategy behind the latest acquisitions, Eng Isam Saud al Zadjali (pictured), CEO — Oman Oil Company, said: “We have always stated that we would like to pay more attention to local investment on the upstream front.
Going forward, you will see more of this trend in Oman — where we take a minority share in upstream projects and partner with international operators.” With the latest acquisitions, OOCEP is by far the largest investor in the nation’s upstream energy sector — after majority state-owned Petroleum Development Oman (PDO), which accounts for much of the nation’s crude output, as almost all of its gas production.
OOCEP currently operates three blocks in Oman (60, 42, and 48) and is a participant in a number of joint ventures, some of which are large-scale projects in the upstream sector, notably the Khazzan tight gas project operated by BP, the Mukhaizna field and Block 9, both of which are operated by Occidental. OOCEP also has a 20 per cent interest in Block 62 — also known as the Habiba Block — operated by Occidental.
Speaking to journalists soon after signing Exploration & Production Sharing Agreements (EPSA) for Blocks 30 and 52, Al Zadjali said OOCEP would seek to leverage the considerable experience and expertise of its two partners — Occidental and Eni — in unlocking the hydrocarbon potential of these concessions.
“These two particular blocks present an opportunity and fulfil our long-term strategy,” said Al Zadjali. “So far we have not been successful offshore of Oman, so we are very pleased that a giant like Eni is coming to Oman to explore in our territorial waters. We would like to be with them every step of the way in this campaign, and we want to participate and become a partner from the beginning,”
Earlier, welcoming Eni’s maiden foray into the Sultanate’s energy sector, Oman Oil’s CEO said: “Eni is known worldwide for its successful offshore exploration in places like Mozambique, Egypt and so on. They are a world-class operator, and we are honoured to be associated with them.”
The JV plans to shoot new high-end 3D seismic in the block in hopes to gaining a “different perspective” about the largely unexplored acreage, with one well planned for drilling as part of its EPSA commitments, he said.
Block 30, the second of the two blocks acquired on Tuesday, further reinforces Oman Oil’s growing partnership with Occidental, said Al Zadjali. In particular, Block 30 along with Block 62 — operated by Oxy and in which Oman Oil has a 20 per cent interest — together offer synergies for exploitation from the standpoint of their gas potential, he noted.
“Gas presents an opportunity in the northern part of Oman, and since we are going to be a partner in Block 62, we thought it is an opportunity to combine the further development of Block 62 with (the future) development of Block 30.
Thus, from a strategic and operational point of view, we thought we should (join hands) with Oxy in Block 30. We are pleased to see that Oxy is still hungry to invest in Oman.”
Significantly, OOCEP is also eyeing acreage offered as part of the newly launched 2017 Bid Round. “We are certainly looking at it and trying to select partners who will bid together. The strategy for Omani Oil is to go upstream with reputable partners,” he added.