Page 4 - MEOG Week 23 2022

MEOG COMMENTARY MEOG

New discoveries to boost Oman

oil output amid gas talks with Iran

Oman is expecting to increase oil production from new discoveries,
while a deal with Iran may finally bring progress on a cross-border

gas effort, though there are questions about feedstock availability.

OMAN/IRAN OMAN plans to increase oil production follow- the overall project covering 32,000 km of 2-D
ing the discovery of new oil deposits and agree- and 2,500 square km of 3-D legacy data. Searcher
ments with Iran to share gas output from a major expects to complete its reprocessing and acqui-
WHAT: offshore asset. sition of new 2-D and 3-D seismic by the end
Muscat has claimed that The Sultanate is the Middle East’s largest of 2023.
new discoveries will help non-OPEC oil producer, with output running In August 2021, the MEM began its 2021
it increase oil production at around 840,000 barrels per day in April from Licensing Round, which ran until March 31 this
by 50,000-100,000 bpd reserves of around 5.2bn barrels. This was in line year and comprised three hydrocarbon conces-
in the next few years, with its OPEC+ production quota which rose to sions – offshore Block 23 and onshore Blocks 38
without providing further 846,000 bpd for May, 855,000 bpd in June, and and 66.
detail. will increase to 868,000 bpd for both July and Meanwhile, Denmark-registered Odin
August. Energi is looking to farm down its 100% stake
WHY: With challenging geology common in the Block 15 concession in northern Oman,
The Sultanate has seen throughout the country, Oman’s key asset is which contains the Ataya discovery and the
output rise in line with the 900,000-square km Block 6 concession, Thimar and Prospect-8 targets with a total com-
OPEC+ production which has a total production capacity of around bined resource estimated at 17mn barrels of oil.
quotas. 650,000 bpd. The acreage is estimated to hold
more than 75% of the Sultanate’s remaining oil Hengam MoU
WHAT NEXT: reserves. Al-Rumhy added that recent memoranda of
Oman and Iran have understanding (MoUs) between Oman and
agreed terms on Discoveries Iran cover the establishment of a long-awaited
production from a shared Minister of Energy and Minerals Mohammed gas pipeline between the two countries as well as
offshore field as well as al-Rumhy said this week that new discoveries the development of the shared Hengam oilfield.
a pipeline that would in the Sultanate would contribute to Muscat’s In late May, his Iranian counterpart, Javad
give Tehran access efforts to raise oil production by 50,000-100,000 Owji, said that the parties were returning to plans
to international gas bpd within the next two to three years. under which a 400-km land-sea pipeline would
markets. While he did not provide details of the dis- link Iran’s southern Hormuzgan Province with
coveries, he said that the Ministry of Energy Oman’s Sohar Port and the Oman LNG facility
and Minerals (MEM) is working to ensure that with a view to liquefying Iranian gas for export.
oil and condensate production is maintained at This week, al-Rumhy explained that they
current levels or increased, “in accordance with would continue discussions for the development
market conditions”. of Hengam, which straddles the maritime bor-
Meanwhile, he noted that oil output would der, with the Omani side located in the offshore
also be aided by ongoing efforts to increase gas Block 8 concession which contains the Bukha
production from state-backed Petroleum Devel- and West Bukha.
opment Oman’s (PDO) Yibal Khuff project as These assets have been in production since
European super-majors Shell and TotalEnergies 2009 and 1994 respectively, with operatorship
lead Blocks 10 and 12 respectively and Italy’s passing from Norway’s DNO to state-owned
Eni develops Block 77. Al-Rumhy added that Oman Oil Company for Exploration & Pro-
Oman’s gas reserves amount to around 24 trillion duction (OOCEP) in 2019 as combined oil and
cubic feet (680bn cubic metres). gas production fell to around 4,500 barrels of oil
In April, Australia’s Searcher announced it equivalent per day (boepd).
had begun reprocessing legacy offshore data Hengam began producing oil in 2010 at a rate
from the Sea of Oman following the recent clo- of around 10,000 bpd and increased to 30,000
sure of the country’s 2021 licensing round. This bpd by 2013 before declining swiftly. It currently
kicked off with the application of modern broad- runs at around 12,000 bpd, with roughly 190mn
band processing and removal technologies, with barrels of super light crude thought to remain

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