Oman Licensing Round offers mix of oil and gas blocks

UPSTREAM INVESTMENT: 11-week-long registration, bidding process begins

Oct 22: Tight gas plays are predominant themes of two of the four blocks offered for investment by the Ministry of Oil & Gas as part of the Oman Licensing Bid Round 2016.

Blocks 30 and 31 onshore Oman are essentially gas blocks offered by the government along with oil blocks 49 (also onshore Oman), and 52, offshore the Sultanate’s southeastern seaboard.

BLOCK 30: According to a backgrounder published by the ministry on the four blocks, tight gas is the predominant play within Block 30, a 1,185 sq km area located in the interior of Oman and straddling the Hajar Mountains.

“To date, gas has been discovered in the Natih and Shuaiba formations. These discoveries have not been fully appraised and adjacent structures remain undrilled. There are currently two additional gas prospects mapped within the block. Within the tight gas play is an unconventional sub-play for the Natih E. This unit is a source interval and also a reservoir. Development of unconventional gas is only beginning in the Sultanate and the Natih E has been recognised as a prime target,” the ministry said.

Six of the nine wells drilled within the block have discovered gas in the Natih or Shuaiba formations, Gas rates for drill stem tests (DSTs) and during long-term tests ranged from 7 million standard cubic feet per day (MMscf/d) to 18 MMscf/d. Two additional gas prospects have been mapped within the block.

BLOCK 31: Tight gas is also the predominant petroleum play in Block 31 which, along with Block 30, was last owned by Norwegian based international energy DNO. The 8,526 sq km concession, also located in the interior of Oman, has produced no discoveries to date, although gas shows were encountered in Suneinah-2 within the Mayhah formation. Four prospects have so far been mapped within the block, according to the ministry.

BLOCK 49: Of the two oil blocks on offer, Block 49, located in southern Oman on the border with Saudi Arabia, holds historical significance for the nation as the first exploration well was drilled within its boundary. Dauka-1, drilled by Dhofar Cities Service Petroleum Corp in 1953, was a dry hole but did have oil shows.

Covering an area of 15,439 sq km, Block 49 is primarily an oil block, according to the ministry. “Potential reservoirs range from the oldest sedimentary rocks in Oman to those deposited during the Cretaceous. These reservoirs are predominantly sandstones although there are carbonate intervals. The reservoirs are also very prolific across other areas of Oman,” it stated.

Circle Oil, the last of a long line of oil firms to have operated the concession, drilled the last well in the block in 2015. There are currently two large prospects mapped within the 3D seismic area, according to the ministry.

BLOCK 52: Rounding off the licensing bid round is Block 52, a massive 90,790 sq km concession located off the Sultanate’s southeastern and southern seaboard. Although there have been no discoveries made to date within this concession, gas shows were encountered in the Lower Tertiary and Aruma sections in the Sawqrah Bay South-1, according to the ministry.

Also of significance is the major discovery made two years ago by Masirah Oil Ltd in Block 50 adjacent to the northern boundary of Block 52. The GA South-1 well indicated light oil production at a rate of 3,000 barrels per day, while the results of the Manarah-1 appraisal well indicated the presence of a working petroleum system in Block 50 earlier this year. The only well in the block, the Sawqrah Bay South-1, was drilled by Petroleum Development Oman (PDO) in 1991.

Registration and bidding for the four blocks begin today, October 23, 2016.