Petrotel gets $450m in funding support for Musandam blocks

DRIVING ECONOMIC GROWTH: Us-based energy firm to kick off development of oil and gas fields in Musandam peninsula

Petrotel Energy, an exploration and production company headquartered in Texas, USA, has secured around $300 million in financing for the development of oil and gas fields in Oman’s Musandam peninsula.

The funding support is being provided by the Overseas Private Investment Corporation (OPIC), a self-sustaining US government agency that helps American businesses invest in emerging markets. In addition to $300 million in financial support, OPIC is also providing $150 million of insurance for Petrotel’s activities.

Petrotel’s local subsidiaries Petrotel Oman LLC (PTO) and Petrotel Oman Offshore LLC (PTOO) operate Block 17 and Block 40 respectively in Musandam. Both licenses are 100 per cent owned by Petrotel Energy.

With funding support from OPIC, Petrotel plans to build facilities, as well as a three-kilometre offshore pipeline that will carry hydrocarbons to the existing Musandam Gas Processing Plant at Tibat.

While oil will be sold to international markets via an offshore loading terminal located off Tibat, the gas will be supplied to the Musandam Independent Power Project, a 120 MW power plant majority owned by Oman Oil Company and brought into operation in 2017.

Importantly, Petrotel’s investments promise to fuel Musandam’s economic development, while also transforming the Us-based energy firm as a major producer of hydrocarbons. Natural gas from the onshore and offshore fields will support investments in civil, economic, tourism and industrial infrastructure, while also opening up opportunities for business development and job creation in this Omani enclave.

Dr Anil Chopra, Chairman and CEO of Petrotel, said: “Petrotel has been active on this project for over a decade and was the first company ever to drill an onshore well in Musandam. We are bringing state-of-the-art American technology to this project and look forward to contributing significantly to the socio-economic growth and development in this Governorate. We are thankful to the Government of Oman for this great opportunity. Now, with financing from OPIC, we can build on the foundation we have laid over the last decade. This project will nurture and strengthen the strong friendship between Oman and the United States of America.”

Petrotel has pledged to recruit hundreds of local Omanis from Musandam Governorate in its operations. OPIC has forecast that the company’s activities will have a positive macroeconomic impact on the local economy, notably via an estimated $60 million in contracts and services procured locally. “Petrotel will also make contributions towards schools, medical clinics and other facilities in the Governorate that will benefit the local community,” the Corporation noted.

Ray W Washburne, President and CEO of OPIC, commented: “The United States and Oman have enjoyed a productive diplomatic relationship for over 200 years. By helping to create jobs and maintain stability in the Governorate, this project will help advance that relationship.”

Covering a total area of around 2.1 million acres, the contiguous Blocks 17 and 40 are home to some of “the most exciting plays in hydrocarbon exploration and production”, according to Petrotel. Block 17 is mostly onshore while Block 40 is mostly offshore with shallow waters averaging 70 metres.

In the south of Oman, Petrotel Oman Onshore LLC is also the operator of Blocks 39 and 67 in Dhofar Governorate with a 100 per cent working interest in the blocks.