Romhi signs 7 oil pacts worth $340m
Source: timesofoman 6/29/2006, Location: Middle East
Exploration
Dr Mohammed bin Hamad bin Saif Al Romhi, minister of oil and gas, yesterday signed seven Exploration & Production Sharing Agreements (EPSAs) worth around $340 million with various companies. The signing of these agreements is seen as a historic step forward for the oil-driven economy of the Sultanate, mainly because the whole of Oman will now be under some or other form of oil and gas exploration, except for Blocks 39 and 43.
The EPSAs were signed for five concession areas in the south and two in the north. These are 54, 55, 56, 57 and 58; and 43A and 43B respectively. Nearly 40 companies had taken part in the bidding process for the blocks, which had taken place last year.
Out of them, the seven consortia emerged successful. A consortium of four Indian companies and one Australian company were also successful bidders. The consortia of companies, which signed the agreements, are Indago (British); MOL (Hungary); Oxy (Oman); Al Zakwani (Oman); Oilex (Australia); PTTEP (Thailand); and Taqah (Oman).
Speaking on the occasion, Dr Romhi said: “We are quite excited that for the first time, the whole country is under real exploration for oil and gas. This is the initial step for these companies to explore the oil and gas. We hope that they will be able to produce oil and gas from these areas.” “The agreements are worth around $340 million which is a lot of money. They (the companies) will not throw money in the desert just like that. So it means that they liked what they saw. It is not always a success story. But a success story is good for our country,” Dr Mohammed said.
The minister said that some of the blockage for which the agreements were signed yesterday was earlier held by PDO, the premier oil company in the Sultanate.
“When we renewed the contract with PDO last year, part of the deal was to return a certain percentage of the acreage held by them. So we created blocks, marketed them and today we signed with the successful companies,” Dr Romhi disclosed.
Under the broad terms of the contract, the companies are obliged to explore oil and gas by discovering and digging many wells for evaluation. They are also expected to carry out earthquake surveys in addition to doing many geological and geophysical surveys.
The companies will be spending more than $346 million for these exploratory activities during the period of the contract. The government of Oman is not responsible for any risks in the investment during the period of the agreement. The Ministry of Oil and Gas hoped that the efforts companies would bear fruit by discovering new oil fields, and then participate to increase the oil production in the Sultanate.
The following are details of the companies and their concession areas.
· Indago, concession area 43A, Al Buraimi in Al Dahira region, 2923 sq kms.
· MOL, concession area 43B, in Al Batinah region, 15923 sq kms.
· Consortium of Occidental consisting of Liwa Energy, Mitsui, concession area no 54, Al Wusta region, 5632 sq kms.
· Al Zakwani consortium, consisting of Everson, Dar Al Hidada, concession area no 55, Al Wusta region, 7564 sq kms.
· Oilex consortium consisting of Videocon Industries, Gas Authority of India Limited, Hindustan Petroleum Corporation Ltd, Bharat Petroleum Corporation Ltd, concession area no 56, Al Wusta region, 5808 sq kms.
· Taqa company, concession area no 57, Dhofar region, 2262 sq kms.
· PTT Middle East, concession area no 58, Dhofar region, 2277 sq kms.
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