Oman oil, gas in­vest­ment set at over $11bn in 2018

NEW MO­MEN­TUM: Ex­plo­ration & signed for Blocks 30, 31, 49 and 52 Pro­duc­tion agree­ments

Oman Daily Observer - - FRONT PAGE - CON­RAD PRABHU MUS­CAT, NOV 14

Out­lays oil and gas are pro­jected well over $11 bil­lion in the 2018 State Bud­get, un­der­scor­ing the con­tin­u­ing im­por­tance of the hy­dro­car­bon in­dus­try to Oman’s eco­nomic de­vel­op­ment, a top gov­ern­ment of­fi­cial said.

Dr Mohammed bin Hamed al Rumhy (pic­tured), Min­is­ter of Oil & Gas, said the Min­istry will con­tinue to stay the course in terms of har­ness­ing the po­ten­tial of the en­ergy to­wards projects at sec­tor in sup­port of the na­tion’s eco­nomic de­vel­op­ment.

“Our pro­gramme will con­tinue as planned,” Dr Al Rumhy said. “In­vest­ment planned for 2018 is es­ti­mated at $11 for next year,” he noted, cit­ing pro­vi­sional fig­ures gar­nered from the Min­istry of Fi­nance. “It could be much more if you take into ac­count (four new con­ces­sion agree­ments signed on Tues­day). All the com­pa­nies are ea­ger to come in and get started with their op­er­a­tions. So the to­tal in­vest­ment next year could ex­ceed $11 bil­lion.”

The Min­is­ter made the com­ments af­ter sign­ing Ex­plo­ration and Pro­duc­tion Shar­ing Agree­ments (EPSA) cov­er­ing the Oil & Gas blocks — 30, 31, 49 and 52 — ten­dered out as part of the 2016 Oman Li­cens­ing Round. The sign­ing took place at the Min­istry of Oil & Gas in the pres­ence of high-level of­fi­cials, as well as rep­re­sen­ta­tives of var­i­ous E&P com­pa­nies and their part­ners that se­cured the licenses to ex­plore for hy­dro­car­bons in these con­ces­sions.

The first EPSA pact was signed with Tethys Oil Mon­tasar Ltd, the lo­cal sub­sidiary of Swedish oil firm Tethys Oil, which was been awarded Block 49, a 15,439 sq km con­ces­sion in the south­west on the Sul­tanate’s bor­der with Saudi Ara­bia.

On­shore Block 31, a 8,528 sq km con­ces­sion in the north­west of the coun­try, was scooped by lo­cal Omani E&P firm ARA Petroleum LLC. The third agree­ment, for Block 30 on­shore Oman, was signed with joint ven­ture of Oc­ci­den­tal of Oman and Oman Oil Com­pany Ex­plo­ration and Pro­duc­tion (OOCEP).

Fi­nally, the joint ven­ture of Ital­ian en­ergy gi­ant Eni SpA and OOCEP inked an agree­ment for the ex­plo­ration and de­vel­op­ment of Block 52, lo­cated off the Sul­tanate’s south­east­ern and south­ern seaboard.

Speak­ing to jour­nal­ists, Dr Al Rumhy pointed out that sig­nif­i­cant in­vest­ments are also en­vi­sioned in down­stream ven­tures dur­ing 2018. “We are go­ing to see money be­ing spent on the down­stream side as well,” he said, cit­ing in par­tic­u­lar the planned con­struc­tion of the Duqm Re­fin­ery, pro­moted by the joint ven­ture of Oman Oil Com­pany and Kuwait Petroleum In­ter­na­tional (KPI) with an in­vest­ment of around $6 bil­lion. “Cheques will be writ­ten for that project next year. We will be look­ing at a 60:40 debt-eq­uity ra­tio, al­though not all of it will be spent next year,” he said.

Com­ment­ing on prospects for sus­tain­ing and bol­ster­ing in­ter­na­tional oil prices in the lead up to the ea­gerly an­tic­i­pated meet­ing of Opec and non-Opec pro­duc­ers set for Novem­ber 30, 2017, Dr Al Rumhy said: “There is near con­sen­sus that the (global out­put re­duc­tion) agree­ment should be ex­tended till the end of 2018. Oman will sup­port the ex­ten­sion.”

Non-Opec mem­ber Oman has lopped off around 45,000 bar­rels from its daily out­put as part of a deal reached late last year by Opec and non-Opec pro­duc­ers to help shore up in­ter­na­tional oil prices. That pact is to ex­pire in March 2018 al­though most global pro­duc­ers, in­clud­ing the Sul­tanate, have backed an ex­ten­sion till the end of the year.

The Sul­tanate will take part meet­ing, Dr Al Rumhy added. in the Novem­ber 30

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