Page 7 - MEOG Week 06 2021

MEOG COMMENTARY MEOG

2019 bid round. The increase came as a result of increased
On February 8, the Ministry of Energy and production from standalone gas assets, includ-
Minerals announced that it had signed a con- ing BP’s giant Block 61 Khazzan-Ghazeer project
tract with local firm Majan Energy Petroleum as well as higher imports. Meanwhile, associated
for Block 71, which contains the ultra-heavy gas production fell by 9.4%.
Habhab oilfield.
An official statement said: “The agreement Duqm development
stipulates the company’s commitment to con- In the downstream sector, operator OQ8
ducting geological and geophysical studies for reported at the weekend that construction of the
the Habhab field, drilling a number of evaluation 230,000 bpd Duqm oil refinery in Oman had
wells and experimental production, and using passed the 75% completion mark.
the latest technology in the field of enhanced OQ8, a 50:50 joint venture between Oman’s
extraction of heavy oil in this region.” state-owned OQ and Kuwait counterpart Kuwait
According to the Ministry, Majan will invest Petroleum International, said in a statement that
$15-20mn to carry out its work alongside Chi- the overall project’s process had reached 76.7%
nese partners. completion as of December 25, compared with
PDO unsuccessfully solicited interest from 72% in November.
companies in January 2017 about entering a ser- The refinery is officially expected to be up
vice contract for the remote Habhab field, which and running in either late 2021 or early 2022. But
the firm estimates to contain around 1bn barrels coronavirus (COVID-19) related disruptions
of stock tank oil initially in place (STOIIP) at could mean delays.
P50, classified as bitumen, with EOR required In June, Dutch transportation firm Mam-
for its production. moet reported delivering key equipment to the
Given that Majan Energy predominantly refinery, including 780-tonne LPG storage tanks.
focuses on oil sector services, it is likely to seek The project’s lead contractors are the UK’s
farm-in partners for field development should its Petrofac, South Korea’s Samsung Engineering
studies prove successful. and Daewoo, Spain’s Tecnicas Reunidas and
Italy’s Saipem. The finished refinery will han-
Output update dle 65% Kuwaiti crude and 35% Omani crude,
Also last week, Oman’s National Centre for Sta- both of which will be stored in a facility Oman is
tistics and Information (NCSI) released data building at Ras Markaz.
showing that Oman’s total liquids output was Strategically located in the path of interna-
347.94mn barrels in 2020, down from 354.39 tional shipping routes in the Indian Ocean and
barrels in 2019. Arabia Sea, the Duqm refinery will primarily
While crude oil production fell by 9.1%, con- export diesel, jet fuel, naphtha and LPG.
densate output rose by 45.2% to reach 69.10mn OQ8 had wanted to add a 1.6mn tonne per
barrels, and helping to offset some of the drop. year (tpy) petrochemicals unit to the complex.
A decline of 7.5% was seen in crude exports, But the joint venture said in November it had
which slipped from 310.33mn barrels in 2019 halted front-end engineering design (FEED)
to 287.04mn barrels last year. Of this, China work on the plan, while its board assesses the
remained by far the largest importer, taking impact of the coronavirus.
248.12mn barrels, with India (17.9mn barrels) Oman is developing a number of energy-re-
and South Korea (4.99mn barrels) taking second lated and other industrial facilities in the port
and third place. of Duqm, including a plant for green hydrogen
Despite the fall in output, gas production and production. The facility will consist of a 250- to
imports remained constant, experiencing an 500-MW electrolyser, powered with wind and
increase of 0.4% year on year from 46.4bn cubic solar energy. This electrolyser will convert water
metres in 2020, compared with 46.2 bcm a year into hydrogen and derivatives such as green
earlier. ammonia to energy consumers to Europe.™

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