Italy's Eni to explore offshore block in Oman

English

Italian major Eni has acquired rights over the only maritime block offered during Oman’s latest licensing round, launched late last year, according to a report by Your Oil and Gas News.

The move comes as a considerable fillip to Muscat’s long-standing efforts to find and develop offshore oil and gas reserves. The allocation was made in the context of a broader co-operation agreement with state-owned Oman Oil Co. (OOC).

The block is the only one of four offered during the bid round to have been allocated thus far – presumed to reflect a continued bearishness in the industry rendering investment in Oman’s challenging and dispersed fields relatively unattractive.

The memorandum of understanding (MoU) signed in Milan by OOC CEO Isam al-Zadjali and his Eni counterpart, Claudio Descalzi, called for the two parties to “to explore co-operation opportunities in the oil and gas sector,” according to the report.

It granted the Italian E&P company, in partnership with OOC subsidiary Oman Oil Company for Exploration & Production (OOCEP), exploration rights in Block 52 – with neither the size of the respective shareholdings nor the precise nature of the licence agreement being revealed.

The block covers a 90,760 sqkm area off the Sultanate’s southeast coast and was described in information released by the Ministry of Oil & Gas (MOG) when launching the latest licensing round in October as being primarily an oil target.

As in the rest of Oman’s offshore territory, the area has a long history of unsuccessful exploration. Ireland’s Circle Oil relinquished the licence in 2015 as part of a wider withdrawal from the country in response to the global industry downturn. Previous work had been carried out by the US’ Sun Oil, Amoco – subsequently acquired by BP – and the majority state-owned Petroleum Development Oman (PDO).

The last of these – the government-led joint venture with Royal Dutch Shell that is the Sultanate’s largest oil and gas producer – drilled the only well in the block in 1991.

Al-Zadjali earlier in the year laid out a local expansion strategy for OOCEP calling for partnership with leading IOCs to boost reserves and production from the sultanate’s diverse and complex fields. In April, he signed a heads of agreement (HoA) with Shell for exploration in the 25,600-square km Block 42 in the north-east.

Harnessing Eni’s technical prowess in offshore exploration – demonstrated in the MENA region with the discovery of Egypt’s giant Zohr gas field two years ago – for the Italian company’s first investment in the country was a particular coup.

Descalzi explained the move in the context of a “strategy aimed at diversifying our exploration portfolio across basins with liquid hydrocarbon potential while keeping high-quality stakes throughout the exploration phase”.

Source: 
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