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MEOG PROJECTS & COMPANIES MEOG
Maha farms down Mafraq stake
OMAN
SWEDISH explorer Maha Energy has farmed- down a 35% stake in Oman’s Block 70 explora- tion and production-sharing agreement (EPSA) to local firm Mafraq Energy. Following the deal, which remains subject to Omani government approval, Maha will hold 65% in the concession and remain operator.
Block 70 contains the Mafraq heavy oilfield which was discovered by state-backed Petroleum Development Oman (PDO) in 1988. Between then and 2010, the field was further delineated by four wells and 3D seismic in stages, but never developed owing to low oil prices and the high cost of production.
Maha was awarded a 100% stake in the 639-square km block by the Sultanate’s Ministry of Energy and Minerals in September 2020 fol- lowing months of speculation.
According to a press release this week, Mafraq Energy will “reimburse Maha for their prorated share of all past costs including the signature bonus [and ... ] will also be required to pay their shareofallfutureexpendituresonBlock70”.
Maha CEO Jonas Lindvall said: “We are delighted to have Mafraq Energy LLC join us on Block 70. Mafraq Energy LLC brings extensive experience of the Mafraq field and the surround- ing areas in Oman. The fact that Mafraq Energy joins us is perhaps the best evidence yet of the future potential of the Mafraq field.”
Meanwhile, Mafraq director Talal Al Subhi said: “We are pleased and honoured to join Maha Energy to commercialise Oman’s national resources. The farm out arrangement is also completely aligned with the realisation of the Oman Vision 2040’s “Growing the Private Sec- tor”, and we are proud to be doing our part.”
The EPSA was awarded with an initial explo- ration period of three years and with an optional extension period of another three years. Should a commercial discovery be made, this can be extended into a 15-year production licence, with an optional five-year extension, while the state oil firm OQ has the right to acquire a 30% interest.
The Mafraq field has been estimated to con- tain 185-280mn barrels of original oil in place (OIP), though Maha’s latest reports suggest a far more conservative combined proven plus prob- able (2P) reserves and 2C resources figure of 33.41mn barrels as of December 31, 2021.
During the EPSA’s initial period, Maha is committed to carry out geological studies, seismic reprocessing and well drilling. In 2020, the company said it had planned for a phased appraisal and development approach and an “initial committed work programme investment estimated at approximately $14.6mn”. These investments cover the exploration phase of the field’s development, with a further $31.8mn of planned spend to increase output to 3,000 bar- rels per day (bpd) from 2024 onwards, pending
results.
The partners intend to begin a six-well drill-
ing campaign to evaluate the field during Q4 which will influence their field development plan (FDP). Gulf Drilling’s rig #109 has been contracted for the job which will comprise two appraisal wells and four pilot production wells.
Lindvall said earlier this year that the two appraisals will be drilled first “to acquire impor- tant information such as the oil water contact, crude oil properties and cores of the produc- ing interval”. Four horizontal wells will then be drilled and placed on extended well-test pro- duction “to evaluate water encroachment in the fractured limestone reservoir.” The company anticipates that rig mobilisation will begin in October.
The programme was meant to have begun on June 30, but the originally-contracted rig – Global Business Services’ GBS-1 unit (formerly OGI-4) – could not be delivered “due to techni- cal deficiencies uncovered during pre-mobilisa- tion inspections”.
Maha has committed to drill eight horizontal wells under the second phase of development, raising output to an expected 3,000-bpd peak. It intends to maintain this plateau through its third phase, beginning with a single exploration well followed by up to 200 development wells by mid-to-late 2024 providing commerciality is declared.
The company has also noted that under a previous operator, Mafraq tested at 15,700 bpd of heavy oil from a single well over a 23 day well- test in 1991.
“The Mafraq field accounts for almost half our future oil volumes and if we can prove up the oil-water contact to where strong indications suggest it is, we are poised to deliver significant volumes of oil from Oman,” Lindvall said.™
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Week 32 10•August•2022