Maha Energy, a Sweden-based oil exploration and production company on Friday announced that it will be awarded a new oil exploration block (Block 70) by Oman’s Ministry of Energy and Minerals.
Block 70 is an onshore block in Oman that includes the shallow undeveloped Mafraq heavy oil field. The block is located in the middle of the prolific and oil-producing Ghaba Salt Basin in the central part of the sultanate.
‘Maha Energy, through a wholly-owned subsidiary, will be the operator of the Block 70 and hold a 100 per cent working interest. The entry into Oman marks a milestone for the company’s diversification strategy,’ Maha Energy said in a press statement.
The company said that the block agreement is scheduled to be signed on October 1, 2020 and is further subject to a Royal Decree. It added that further details of the block and the future work programme will be announced after the effective date of the exploration and production sharing agreement (EPSA).
Jonas Lindvall, president and CEO of Maha Energy, said, “To be allowed an opportunity to explore and develop the Mafraq oil field is an exceptional opportunity to add value to Maha Energy and the people of Oman. The Mafraq oil field contains significant amounts of oil and previous and extensive pump tests has proven the productivity of the field.”
According to Maha Energy’s statement, the Mafraq oil field was discovered by Petroleum Development Oman (PDO) in 1988 and was further delineated by four wells and 3D seismic in stages until 2010. Two wells were placed on pump production tests, of which one was placed on an extended test in order to prove long-term productivity.
Maha Energy said that the Mafraq field is estimated by third parties to contain between 185mn–280mn barrels of original oil in place. The productive reservoir is shallow, at approximately 430m below ground level.
Lindvall said, “The fact that PDO did not develop this asset is by no means a reflection of the quality of the asset, it just reflects the reality of constrained resources and project ranking.”
The company said the Block 70 covers an area of 639 sq km and is covered by both 2D and 3D seismic data that has been acquired by previous operators and has been made available to Maha Energy. Eight wells have been drilled within the block boundary, five of which are on the Mafraq oil field.
The exploration and production sharing agreement for Block 70 covers an initial exploration period of three years with an optional extension period of another three years, Maha Energy said.
‘In case of a commercial oil or gas discovery, the EPSA can be transformed into a fifteen-year production license which can be extended for another five years. In case of a commercial discovery, the Oman government’s oil company has a right to acquire up to a 30 per cent interest in Block 70 against refunding the pro-rata share of past expenditure. The initial work commitments during the first period include geological studies, seismic reprocessing and well commitments,’ Maha Energy said.
Maha Energy operates four oil fields globally: Tartaruga and Tie in Brazil, Powder River (LAK Ranch) and Illinois basins in the United States.