Page 10 - MEOG Week 05 2023

MEOG PROJECTS & COMPANIES MEOG

Maha and Mafraq sign Block 70 agreement

OMAN SWEDISH explorer Maha Energy and local firm value (ICV)] content of Block 70.”
Mafraq Energy this week signed a joint operat- The EPSA was awarded with an initial explo-
ing agreement for Oman’s Block 70 concession ration period of three years and with an optional
following a farm-in deal last year. extension period of another three years. Should
Maha operates Block 70 with a 65% share- a commercial discovery be made, this can be
holding, while Mafraq holds the remainder fol- extended into a 15-year production licence,
lowing its August farm-in to the exploration and with an optional five-year extension, while the
production-sharing agreement (EPSA), with state oil firm OQ has the right to acquire a 30%
that deal requiring the Omani firm to reimburse interest.
Maha for its “prorated share of all past costs, The Mafraq field has been estimated to con-
including the signature bonus [and …] its share tain 185-280mn barrels of original oil in place
of all future expenditures on Block 70.” (OIP), though Maha’s latest reports suggest a far
The licence contains the Mafraq heavy oil- more conservative combined proven plus prob-
field, which was discovered by state-backed able (2P) reserves and 2C resources figure of
Petroleum Development Oman (PDO) in 1988. 33.41mn barrels as of December 31, 2021.
Between then and 2010, the field was further During the EPSA’s initial period, the parties
delineated by four wells and 3D seismic in stages, are committed to carry out geological studies,
but never developed owing to low oil prices and seismic reprocessing and well drilling. In 2020,
the high cost of production. Maha said it had planned for a phased appraisal
Maha was awarded a 100% stake in the and development approach and an “initial com-
639-square km block by the Sultanate’s Ministry mitted work programme investment estimated
of Energy and Minerals in September 2020 fol- at approximately $14.6mn”.
lowing months of speculation. These investments cover the exploration
In a press release issued by Maha this week, phase of the field’s development, with a further
CEO Paulo Mendonça said: “We are proud to $31.8mn of planned spend to increase output to
have finalised yet another major milestone in 3,000 barrels per day (bpd) from 2024 onwards,
what is to be a great partnership. Maha is mov- pending results.
ing forward to commence the testing, aiming for The company has also noted that under a pre-
fast production of Block 70 and having Mafraq vious operator, Mafraq tested at 15,700 bpd of
Energy as its local partner with competent and heavy oil from a single well over a 23-day well-
experienced Omani team, bringing knowledge test in 1991.
of the local market to the operations.” The partners intend to begin a six-well drill-
Meanwhile, Mafraq director Talal Al Subhi ing campaign to evaluate the field which will
said: “Mafraq Energy is honoured to play its part influence their field development plan (FDP).
in achieving Vision 2040 as set by HM Sultan Gulf Drilling’s rig #109 has been contracted for
Haitham bin Tariq Al Said. This partnership is a the job which will comprise two appraisal wells
true embodiment of enhancing the [in-country and four pilot production wells.™

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