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Bid Deadline for New Oil Blocks Extended

Source: Oman Observer 10/20/2014, Location: Middle East

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Oman’s Ministry of Oil and Gas has announced a month’s extension in the deadline for the submission of bids for five new oil and gas blocks that were floated recently as part of the 2014 Oman Bid Round. The submission date for offshore Blocks 18 and 59 and onshore Blocks 43A, 54 and 58, originally slated for October 31, 2014, has now been put off to November 30, 2014, the Ministry said in a statement. According to officials, the extension is designed to allow enough time for interested oil and gas companies — both local and international — to get their queries with regard to the blocks suitably addressed and clarified. It was also necessitated by a desire to compensate for the two lengthy sets of Eid holidays coinciding with this Bid Round.

Up for grabs as part of the 2014 Bid Round are two offshore blocks and three onshore blocks coverage a total acreage of over 75,000 sq kilometres. The largest of the five blocks on offer is the offshore Block 59, located off the Sultanate’s central east coast. Covering an area of 40,488 sq kilometres, it is one of the largest concessions within the Sultanate’s upstream sector with several prospects and leads already mapped on high quality 2D-data. Also expected to elicit much interest from international players is offshore Block 18 located in the North Sohar Basin between the Batinah coast and the Makran Accretionary Prism. Previously held by India’s Reliance Industries Limited until its relinquishment in 2011, the concession covers an area of 21,140 sq kilometres with water depths ranging from 30 to 3,000 metres. Three wells have been drilled by previous operators with a number of plays identified so far.

The most exciting acreage is onshore Block 54, which flanks the world-class South Oman Salt Basin. The latter Basin has a stock tank original oil in place (STOIIP) potential of 16.5 billion barrels with a daily production of 173,000 barrels. Covering an area of 5,632 sq kilometres and located in the southeastern part of the country, the block adjoins PDO’s Block 6 and Oxy’s Block 53 Mukhaizna field. Just south of the concession are Blocks 3 and 4, where production averages in excess of 20,000 barrels per day of oil.

Onshore Block 43A, on the other hand, is under-explored with only one well drilled to date. The concession, located north of the Oman Mountains, covers an area of about 6,879 sq kilometres. Rounding off the tally is onshore Block 58, which is situated on the southern edge of the Western Flank and covers an area of 2,277 sq kilometres between the South Oman Salt Basin and Rub Al Khali Basin.

Dr Mohammed bin Hamad al Rumhy, Minister of Oil and Gas, is optimistic that international investment interest in the new acreage will be vigorous.

“We already know that interest is good. The round has triggered a lot of interest, more so after the successes reported in places like Masirah, and Block 3 and 4. (Those successes) have opened up new geological theories about where to look for oil and gas. I look forward to seeing who is coming, who is knocking on our doors for these five blocks. I understand the interest is encouraging.”

Speaking to the Observer, Dr Al Rumhy said the recent discovery of oil in offshore Block 50, also known as the Masirah Block, bodes well for offshore exploration. In March, Masirah Oil Limited announced that it had successfully tested an exploration well in its 17,000 sq km concession. It was the first offshore oil discovery in the east of Oman after more than 30 years of exploration activities.

Masirah’s success is expected to spur significant interest in Oman’s offshore potential, says Dr Rumhy. “The deep waters of the Sea of Oman will also open up new possibilities. Total has taken Block 41 is already working on it. Hopefully the results of their work will be encouraging. If that block comes up with good results, then the offshore scene in Oman will change. I’m also encouraged that Block 18, which is next to 41, has triggered interest from a few companies. These are challenging deep waters. But there is an appetite from the market to test it. I hope we get one or two good companies to look into our offshore blocks.”

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