First oil from Masirah Block eyed in H2 2019
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.