MUSCAT, SEPT 25 –
Swedish-based international upstream energy firm Maha Energy AB has announced that it has been selected by Oman’s Ministry of Energy and Minerals to explore for hydrocarbons in Block 70, a new block that contains the potentially prolific Mafraq heavy oilfield.
An Exploration and Production Sharing Agreement (EPSA) is scheduled to be signed with the Omani government on October 1, 2020, according to the Stockholm-headquartered company. The pact will mark Maha Energy’s maiden investment in Oman’s upstream sector, and follows on the heels of a similar EPSA deal signed recently by the Sultanate with US energy firm EOG Resources Inc, for Block 36, just over a week ago.
Block 70 is one of six Oil & Gas blocks that were tendered out by the ministry as part of the 2019 Oman Licensing Round. Along with 58, 73, 74, 75 and 76, Block 70 was previously part of the prolific Block 6 currently operated by majority-government-owned Petroleum Development Oman (PDO).
A relatively tiny concession, covering an area of 639 sq km in central Oman, Block 70 contains the Mafraq field, a Shuaiba formation heavy oil accumulation. Undeveloped, it is a potential secondary-recovery target. There are seven wells drilled in this block. Most are older wells, drilled prior to 1992. Primary targets for the older wells were the Shuaiba Formation and the Natih Formation, where gas was discovered. Besides the Natih and Shuaiba formations, deeper targets exist. These include the Barik, Miqrat and Amin. All are gas-condensate targets. That makes this block an oil (proven) and gas-condensate (prospective) block, according to the ministry.
Maha Energy, through a wholly-owned subsidiary, will be the operator of the Block and hold a 100 per cent working interest. In a statement, Jonas Lindvall, President and Chief Executive Officer of Maha, said: “To be allowed an opportunity to explore and develop the Mafraq oil field is an exceptional opportunity to add value to Maha and the people of Oman. The Mafraq oil field contains significant amounts of oil and previous and extensive pump tests have proven the productivity of the field.”
First discovered by PDO in 1988, the Mafraq field is estimated to contain between 185-280 million barrels of original oil in place (OIP). The EPSA pact for Block 70 covers an initial exploration period of three years with an optional extension period of another three years, the company said. In the event of a commercial oil or gas discovery, the EPSA can be transformed into a 15-year production licence which can be extended for another five years. Additionally, in case of a commercial discovery, an Omani state-owned oil company has a right to acquire up to a 30 per cent interest in Block 70 against refunding the pro rata share of past expenditure. The initial work commitments during the first period include geological studies, seismic reprocessing and well commitments,” it further added.
Maha Energy’s foray into Oman is part of its strategy to diverse its portfolio. The Company currently operates oilfields in Brazil and the United States.
MUSCAT, SEPT 25 –