Bids close for two hydrocarbon blocks

UPSTREAM FOCUS: Bidding for Oman Licensing Round 2016 comes to a close

Bids closed here yesterday, February 15, for two hydrocarbon concessions offered up by the Ministry of Oil & Gas as part of the Oman Licensing Bid Round 2016.

Initial interest in the two licenses — onshore Block 31 located in the northwest of the Sultanate and the offshore Block 52 located off the country’s southern and southeastern seaboard — is reported to have been enthusiastic at the outset. They were among a portfolio of four blocks offered for investment under Exploration & Production Sharing Agreements (EPSA) with the Omani government as part of the latest licensing round.

Tight gas is 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 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 31 is located to the north of some of Oman’s largest oil fields. Like those fields the expected reservoirs are within the Wasia and Kahmah groups. Additional potential may exist within thrust sheets of the Sumeini Group,” the ministry said in a backgrounder on the concession.

Referring to the tight gas potential of the concession, it noted: “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 across northern Oman.”

Also up for grabs is Block 52, a mammoth 90,790 sq km concession off Dhofar Governorate, by far the largest block offered up for investment to date. 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.

The northern boundary of the concession adjoins Blocks 50, where Masirah Oil Ltd announced a major hydrocarbon discovery two years ago. The GA South-1 exploration well in Block 50 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 the offshore concession. The only well in Block 52, the Sawqrah Bay South-1, was drilled by Petroleum Development Oman (PDO) in 1991.

Awards leading to the signing of Exploration & Production Sharing Agreements (EPSA) are expected to be around by March 15, 2017, according to the ministry.

Meanwhile, bids for the onshore Blocks 30 and 49, which were also part of the latest licensing round, had closed during December and January respectively

Oman has pledged to push ahead with its upstream exploration efforts with a view to uncovering new hydrocarbon resources that currently account for around 60 per cent of government revenues.