OMAN is preparing to invite foreign oil companies to bid for five blocks on a production-sharing basis. Oil Minister Mohammed al-Rumhy said:"Hopefully, concession agreements for more than one block will be concluded before the end of the year."
The five proposed onshore and offshore blocks are located between Musandam in the north and Salala in the south, the minister said.The proposed bid round is part of efforts by Oman to attract more foreign investment at a time of declining oil production.
Deputy Oil Minister Nasse al-Jashmi said recently that Oman expected its oil output to increase to 790,000 barrels per day this year, compared with 710,000 bpd in 2007. However, his forecast may be hard to achieve.
Oman's largest producer, Petroleum Development Oman (PDO), said that its crude output will remain at about 550,000 barrels per day over the next three years, after it reported another drop in production last year.
Increases in the country's output may come in later years from enhanced oil recovery projects being undertaken by US oil company Occidental and PDO, but their impact will not be felt yet.
Ziad Khamis Siyabi, director general of the Omani Oil Ministry's development and production department, said in February that Oman was about to offer four exploration blocks in a fresh licensing round, as part of efforts to add to its reserve base. He told Upstream the round would involve one offshore block and three onshore acreages.
Companies would be able to bid for Block 40 off Musandam, in the Persian Gulf, and onshore blocks 17, 36 and 38 in different parts of Oman. It is not yet clear which block will be added by the Omani authorities to the list.The new round was originally due to be launched late last year but more preparation time was needed.
Oman has stepped up explor-ation and field development work in recent years to help reverse a decline from its ageing oilfields and add to its natural gas reserves to help meet increasing energy needs.
© Upstream 2008
