Page 9 - DMEA Week 06 2021

DMEA COMMENTARY DMEA

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

Week 06 11•February•2021 www. NEWSBASE .com P9