Seeking to build on its recent success in bringing Oman’s first offshore oilfield off the east coast into commercial production, Masirah Oil Limited (MOL) says it plans to drill a second production well targeting the newly operational Yumna field in Block 50 early next year.
The announcement was made by Singapore-based oil firm Rex International Holding Limited, which holds a majority stake in Masirah Oil through its indirect wholly-owned subsidiary, Rex Oman Ltd.
Dan Brostrom, Executive Chairman of Rex International, said the proposed Yumna-2 well will be drilled within January 2021, while a new exploration well targeting an identified prospect elsewhere in Block 50 is envisioned as well.
Announcing the company’s financial results for the first half of 2020, Brostrom said the successful commencement of production from the Yumna field represents a “game-changing” start for Rex International.
The Yumna oilfield, previously known as GA South Field, is home to the GA South #1 discovery, which was made in early 2014. At the time, Masirah Oil announced a first-ever hydrocarbon find in the 17,000 sq km concession off the Sultanate’s east coast. Last December, Masirah Oil began drilling the Yumna 1 well to appraise the Yumna oilfield. Early production testing commenced in January this year with oil produced during the field appraisal stored temporarily on an Aframax tanker.
Last month, Oman’s Ministry of Oil and Gas formally approved the Field Development Plan for the Yumna Field and awarded the all-important Declaration of Commerciality (DOC) as well, enabling Masirah Oil Ltd to fully develop the Yumna Field while continuing to explore the rest of Block 50.
While early production had commenced amid a dramatic collapse in international oil prices earlier this year, a degree of stability has since returned to oil markets boding well for the company’s fiscal situation, said Rex International’s Chairman.
“Sale of the Masirah crude started in April 2020 in the second quarter, when Brent oil price was at unprecedented lows due to the COVID- 19 pandemic. The oil price per barrel for sales between April and June was about half of the current August 2020 price of $45 a barrel. We are going into the rest of 2020 with improved contributing factors, with Brent oil price at a more stable a range of about $45 per barrel. We remain in a good financial position and will now book recurrent income from production in the Yumna field in Oman,” Brostrom noted.
“This will enable us to develop Block 50 according to the Field Development Plan approved by the Ministry of Oil and Gas in Oman. Within January 2021, the Yumna 2 well will be drilled and during 2021, there will be an exploration well from one of our already identified prospects,” he further added.
The Yumna-1 well is currently producing over 8,000 bpd of oil through a 1-inch choke, having yielded more than one million barrels of oil by around the time the Declaration of Commerciality was issued by the Omani government on July 12.
Masirah Oil Limited is majority owned by Rex Oman Ltd (86.37 per cent) with minority stakes also held by Petroci, the National Oil Company of the Ivory Coast, and Schroder & Co Banque SA.