US energy firm forays into Oman

Dr Mohammed bin Hamad al Rumhy, Minister of Energy and Minerals, signing the EPSA pact on Wednesday.[/caption]

MUSCAT, SEPT 17 - EOG Resources Inc, one of the largest crude oil and natural gas exploration and production companies in the United States, has signed an Exploration and Production Sharing Agreement (EPSA) with the government of the Sultanate of Oman to explore for hydrocarbons in Block 36 in the southwest of the country. Dr Mohammed bin Hamad al Rumhy, Minister of Energy and Minerals, signed the pact with William R Thomas, CEO and Board Chairman of EOG Resources Inc.

The agreement, signed by the two sides in a virtual setting on Wednesday, grants Houston-headquartered EOG Resources the concession to explore for oil and gas in the 18,556 sq kilometre block extending across the Rub Al Khali basin in the far southwest of the Sultanate. EOG Resources plans to drill at least two exploratory wells by mid-2022 as part of its commitment during the initial three-year phase of the pact.

Wednesday’s EPSA agreement with the US firm follows the departure of Canadian energy firm Allied Petroleum Exploration (APEX) from Block 36. APEX was awarded a 100-per cent working interest and operatorship of the Block in September 2011.

In September 2013, APEX concluded a farm-out agreement with the Norwegian company, DNO International. DNO acquired 1,000 km of new high-resolution 2D seismic and reprocessed another 4000 km of legacy 2D seismic. On the basis of the reprocessed and newly acquired seismic, APEX and its partner identified a number of structural prospects and numerous exploration leads.

The first exploration well under the farm-out, Hayah-1, was drilled by DNO in May 2016 as a stratigraphic test in the previously undrilled western portion of the Block, reaching a total depth of 3010m.

DNO subsequently decided to withdraw, having invested more than $30 million in exploration costs, returning 100 per cent of the Block to APEX, effective in early 2017.

Publicly traded EOG Resources, which is listed on the New York Stock Exchange, has proved reserves in the United States, Trinidad and China. EOG says its business strategy is to maximise the rate of return on investment of capital by controlling operating and capital costs and maximising reserve recoveries.

As of December 31, 2019, EOG’s total estimated net proved reserves were 3,329 million barrels of oil equivalent (MMBoe) comprised of 51 per cent crude oil and condensate, 22 per cent natural gas liquids and 27 per cent natural gas. Approximately 98 per cent of these reserves were located in the United States. EOG’s total worldwide production in 2019 was 299 MMBoe.