MUSCAT - Dr Mohammed bin Hamad al Rumhy, Minister of Energy and Minerals, signed a new Exploration and Production Sharing Agreement (EPSA) with Maha Energy (Oman) Limited, a wholly-owned subsidiary of Sweden’s Maha Energy AB, covering the exploration and development of hydrocarbons in Block 70 in central Oman. Signing on behalf of the Swedish firm was Talal bin Saif al Subhi, representing Maha Energy (Oman) Limited.
The pact will help unlock the heavy oil potential of the Mafraq oilfield, which is the most important prospect within the relatively tiny 639 sq kilometre concession — 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).
In a statement, the Ministry said the Swedish firm, as the operator with a 100 per cent working interest in the Block, will undertake geological and geophysical studies and 3D seismic reprocessing, as well as drill appraisal wells to evaluate the potential of the Mafraq 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).
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.
Block 70 will mark Maha Energy’s maiden foray into Oman’s upstream sector. 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 license 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.
Stockholm-headquartered Maha Energy currently operates oilfields in Brazil and the United States.
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