Project partners commit $500m in gas exploration, Two more gas blocks to be awarded early next year
MUSCAT -- Oman's government yesterday signed a landmark concession agreement covering the exploration and development of potential gas reserves in Block 62 (Habibah) in the Dakhiliya region. Dr Mohammed bin Hamad al Rumhy, Minister of Oil and Gas, signed the Exploration and Production Sharing Agreement (EPSA) on behalf of the government, with Occidental Oman Gas Company, a subsidiary of energy major Occidental Petroleum. Oxy's partners in the project are Oman Oil Company, a wholly owned energy investment of the Omani government, and the Sixteenth Investment Company, a special purpose vehicle owned by Mubadala Development Co, which in turn is a wholly owned entity of the government of the Emirate of Abu Dhabi.
Representing Oxy at the signing ceremony was Glenn Vangolen, President & General Manager of Occidental of Oman Inc. Oman Oil was represented by its CEO, Ahmed bin Salim al Wahaibi, while Maurizio La Noce, Executive Director, signed for Mubadala. Occidental Oman Gas, as operator of Block 62, along with its partners are committed to investing around $500 million in exploration activities targeting Habibah's gas potential. Part of this investment will go towards drilling exploratory wells, appraising and developing four fields and installing gas treatment facilities at Habibah.
Later in remarks to the Observer, Dr Al Rumhy said the concession award represented another successful breakthrough in the Ministry's ongoing efforts to bring in new players to develop and explore for new gas reserves. "This is in continuation of that strategy that ended up bringing British Gas and BP into the country. We sliced off three blocks which were under PDO's exploration activities on behalf of the government. The first of these blocks (earmarked for new companies) was signed away today. By January, we hope to be able to sign two more concession agreements specifically for gas."
As operator of the 2,269 sq km block, Oxy will endeavour to assess the entire gas potential of the concession, Dr Al Rumhy said. "There is a small discovery of shallow gas, but this is not the focus of this project. Rather the focus is the exploration part of it. We think there is a gas potential similar to BP's block (61), but we don't know yet. But the company is committed to carrying out extensive exploration in this block." Occidental's Glenn Vangolen welcomed the award of the Block 62 concession as a reflection of the Omani government's confidence in the company and its partners. "It's another piece of Oxy's portfolio here.
We can help in expanding the gas business the country needs so much," he commented. Earlier, Ali bin Thabit al Battashi, Director General of Planning and Studies at the Ministry of Oil and Gas, who headed the government side in negotiations leading to the Habibah concession award, praised the "cordial, constructive and positive spirit" that contributed to a successful agreement on Block 62.
He thanked Occidental, Oman Oil and Mubadala, as well as PDO and Shell, for their constructive role in bringing about a successful conclusion to the negotiations. Also present at yesterday's signing were John Malcolm, PDO Managing Director, Dr Andrew Wood, Shell Country Chair and General Manager, Khalifa bin Mubarak al Hinai, Technical Advisor to the Minister of Oil and Gas, and a number of senior officials of the Ministry of Oil & Gas.
By Conrad Prabhu
© Oman Daily Observer 2008
