First oil from Masirah Block eyed in H2 2019

Oman Daily Observer - - BUSINESS - CON­RAD PRABHU MUS­CAT, OCT 3

A key in­vestor in Masirah Oil Lim­ited, which has a 100 per cent in­ter­est in Block 50 – an off­shore con­ces­sion lo­cated off Masirah Is­land on the Sul­tanate’s east­ern seaboard – says it is on track to bring­ing an im­por­tant dis­cov­ery into com­mer­cial pro­duc­tion dur­ing the se­cond half of next year.

Block 50 is home to the GA South-1 dis­cov­ery, where ev­i­dence was uncovered in Fe­bru­ary 2014 of the pres­ence of the first work­ing petroleum sys­tem off the Sul­tanate’s east coast.

In a state­ment is­sued ear­lier this week, Sin­ga­pore-based Rex In­ter­na­tional Hold­ing Lim­ited, a ma­jor­ity share­holder in Masirah Oil Lim­ited, said it had com­pleted fea­si­bil­ity and con­cept stud­ies that had val­i­dated its ini­tial find­ings with re­gard to the hy­dro­car­bon po­ten­tial of the new dis­cov­ery. Based on the out­come of these stud­ies, it af­firmed plans to bring the field into pro­duc­tion in the se­cond half of 2019.

Rex In­ter­na­tional Hold­ing, a spe­cial­ist oil ex­plo­ration and pro­duc­tion com­pany, holds an ef­fec­tive in­ter­est of 92.65 per cent in Masirah Oil Lim­ited (MOL) through its in­di­rect wholly-owned sub­sidiary Rex Oman Ltd. Other share­hold­ers of MOL are PETROCI, the Na­tional Oil Com­pany of the Ivory Coast (also known as Côte D`ivoire), hold­ing a 2.35 per cent stake, and Schroder & Co Banque SA (five per cent).

Dur­ing a 48-hour test tar­get­ing the GA South-1 dis­cov­ery in 2014, hy­dro­car­bons were flowed to the sur­face and the well achieved a flow rate of 3,500 stock tank bar­rels per day (stb/d) of light oil with no wa­ter pro­duc­tion. Prospec­tive re­sources (gross mean un­risked) in the en­tire con­ces­sion were es­ti­mated to be about 4.7 bil­lion bar­rels of oil equiv­a­lent by Aker Geo and Pareto Asia (28 Fe­bru­ary 2012).

Sig­nif­i­cantly, Rex In­ter­na­tional also an­nounced that it was aban­don­ing plans for a farm-out of a “sub­stan­tial eq­uity in­ter­est” in Block 50. It at­trib­uted the change of strat­egy to the com­ple­tion of its fea­si­bil­ity and con­cept stud­ies on the GA South-1 dis­cov­ery well.

“The fea­si­bil­ity study is based on re­pro­cessed seis­mic data which were re-an­a­lysed with an up­dated ver­sion of Rex Vir­tual Drilling and sub­stan­tial con­ven­tional in­ter­pre­ta­tion. Fol­low­ing the com­ple­tion of the fea­si­bil­ity study which fur­ther val­i­dated the ear­lier stud­ies, the Group plans to achieve pro­duc­tion in the se­cond half of 2019,” the com­pany said in a press state­ment.

Dan Broström, Ex­ec­u­tive Chair­man of Rex In­ter­na­tional Hold­ing, stated, “The re­sults of the fea­si­bil­ity study are very en­cour­ag­ing and we are of the view that the GA South-1 dis­cov­ery well is a very valu­able as­set. Al­though we had pre­vi­ously planned to farm out a larger in­ter­est in the con­ces­sion to re­duce our hold­ing risks, we be­lieve that there are mer­its in main­tain­ing a high eq­uity stake in the block to reap po­ten­tial ben­e­fits of more up­side and cash flow when there is pro­duc­tion. In the mean­time, we are look­ing at other non-di­lu­tive fi­nanc­ing op­tions to help fund oil pro­duc­tion costs.”

KEY MILE­STONE: A DEC­LA­RA­TION OF COM­MER­CIAL­ITY (DOC) BY THE OMANI GOV­ERN­MENT WILL BE A PRE­REQ­UI­SITE FOR COM­MER­CIAL PRO­DUC­TION FROM THE GA SOUTH-1 DIS­COV­ERY TO COM­MENCE IN EARNEST.

Newspapers in English

Newspapers from Oman

© PressReader. All rights reserved.