Oman Oil subsidiary takes over Block 8 as interim measure

Oman Oil Company Exploration and Production (OOCEP), the upstream arm of Oman Oil Company (OOC), has been assigned temporary responsibility for Block 8 offshore the Musandam Peninsula — home to the Sultanate’s only offshore producing wells — following the relinquishment of the licence by its previous operator.
Norwegian oil and gas firm DNO announced earlier this year that it was exiting the Block as part of a “high-grading” of its upstream portfolio in the region.
But given Block 8’s strategic importance as the source of natural gas for Musandam Governorate’s only gas-fired power plant, OOCEP has been tapped to take over the concession as an interim measure pending the finalisation of a “long-term solution”, according to a news report in the Middle East Economic Survey (MEES).
The weekly newsletter quoted Oman’s Minister of Oil and Gas, Dr Mohammed bin Hamad al Rumhy, as stating that the hydrocarbon potential of Block 8 is still promising despite declining output from the Bukha and West Bukha fields. Natural gas output from the fields is currently channelled to the Musandam Power Plant — a 120 MW capacity facility that came into operation last year.
“We’ve given a service contract to one of our own firms, OOC, to take over and continue the operation, and now we are looking at a long-term solution,” said Dr Al Rumhy. “That Block is interesting because it supplies gas to one of the power stations in Khasab, and we need that gas to continue otherwise there will be a disruption of utility in Musandam.”
Block 8, according to the minister, has not been adequately explored by past operators. “So we are looking for a company, and it could be OOC, to shoot 3D seismic to redefine the block. It’s possible someone will come and say ‘there is no structure there’ but we think there is potential.”
“Even in some of our private discussions with DNO some of their key people have said there is potential in Bukha — the old discovery. Around the old discovery there is a nearby shale oil prospect that was not explored, so I am optimistic that someone can give new life to Block 8,” Dr Al Rumhy further noted.
Also promising is the hydrocarbon potential of Blocks 17 and 40, operated by US-based exploration firm PetroTel, and located adjacent to Block 8. “The explorer there is very optimistic that there will be a declaration of commerciality, particularly of gas, so if they succeed they will complement Block 8’s declining production, which is why DNO is leaving,” Dr Al Rumhy added.
Hydrocarbon production from Block 8 totalled 1.6 million barrels of oil equivalent (MMboe) in 2017, with a cumulative production of 89.5 MMboe since the West Bukha field came into operation in 1994 followed by Bukha in 2009.
Output from Block 8 has been on the downtrend over the past several years from 15,678 boepd in 2014 to 8,193 boepd in 2015, slumping further to 5,325 boepd in 2016. Last year, volumes dipped to 4,484 boepd, roughly split even between oil and gas.