Conrad Prabhu –
MUSCAT, FEB. 10 –
DNO, the Norwegian oil and gas firm that operates Oman’s only producing offshore fields, has announced a “stepped up drilling campaign” targeting its Block 8 concession in the far north of the Sultanate.
Announcing its interim 2016 results over the weekend, the Oslo-based operator said it plans to bring two wells into production in its Bukha and West Bukha assets within the Block 8 licence off Musandam Governorate.
“During the first quarter of 2017, DNO initiated a 100 per cent sole risk re-drill of the West Bukha-5 well and was planning the reinstatement of the Bukha-1 well,” the company said.
Funding for both initiatives will be part of an estimated $100 million capital investment pledged by DNO during 2017 across its portfolio of operations encompassing not only Oman, but also its production and exploration assets in Kurdistan, Tunisia, Somaliland and the United Arab Emirates. The company’s total operational spend is projected at $185 million this year.
The new investments planned in Block 8 are expected to bolster output from the Bukha and West Bukha fields, which have been on a downtrend in recent years. Gross production from the fields totalled 5,325 barrels of oil equivalent per day (boepd) in 2016, with output split equally between oil and gas. This compares with an output of 8,193 boepd in 2015, down from 15,678 boepd a year earlier.
Produced volumes from Block 8 totalled 1.9 MMboe (5,325 boepd) in 2016, with cumulative field production through end-2016 of 87.9 MMboe, the company said.
Gross 2P reserves (the sum of proved and probable reserves) in the Block are currently estimated at 4.1 million barrels of oil equivalent (MMboe), of which 2.6 MMbbls comprise oil, condensate and other liquids and 1.5 MMboe (equivalent to 8.9 billion cubic feet) is gas.
Over the past two years, DNO has seen its once considerable portfolio of exploration assets in the Sultanate whittle down from four in 2014 to just one presently, viz Block 8. Previous licenses Block 30 and 31 were relinquished in 2015 as part of the company’s “consolidation and rationalization” strategy.
Also under relinquishment is Block 36 in the southwest of the Sultanate. Hayah-1, an exploratory well drilled on the block early in 2016, reached a total depth of 3,010 metres but failed to “encounter hydrocarbons other than minor gas shows”, the company said. “The well has been plugged and abandoned and the licence is under relinquishment,” DNO stated.
Importantly, hydrocarbons from DNO’s Block 8 license are of strategic significance for the Sultanate because the associated gas and liquids in particular are channeled to the Musandam Gas Plant, currently in operation at Tibat in Musandam Governorate.
Wholly owned by Oman Oil Company Exploration & Production (OOCEP), a subsidiary of Oman Oil Company, the facility has earmarked part of the gas output for the governorate’s first Independent Power Project (IPP), which has been developed jointly by Oman Oil Company and LG International. The plant is expected to come into operation shortly.