Oman’s Ministry of Energy and Minerals has signed a deal with the US’ EOG Resources for Block 36.
The official Oman News Agency reported the agreement. Omani Minister of Energy and Minerals Mohammed bin Hamad Al Ramahi signed the deal with EOG’s chairman and CEO Bill Thomas.
The block in question is in the Rub’ al Khali, or empty quarter, in Oman’s southwest. The licence covers 18,556 square km.
EOG plans to drill at least two oil wells by mid-2022.
Al Ramahi said the deal represented the “next step for the Sultanate to determine the resource potential of the Rub Al Khali Basin”.
EOG’s Thomas welcomed the “opportunity to evaluate this oil-rich basin for potential horizontal development and look forward to working alongside the ministry to expand the potential of Oman’s oil resources”. EOG is primarily focused on the US but it also has interests in Trinidad.
EOG confirmed the award to Energy Voice.
Speaking to Energy Voice, IGM Energy’s principal advisor Ian Simm said the deal was positive for Oman’s upstream. “It also further illustrates the shift Oman has seen away from its traditional route of licensing rounds towards direct negotiations and farm-ins. The Ministry of Oil & Gas (MOG) only awarded one block (Block 58 to Tethys Oil) during its last licensing round. However, IOC interest in brownfield assets remains high.
“The Rub’ al Khali is highly prospective, though Block 36 is significantly underexplored. EOG is a horizontal drilling specialist with significant experience of developing unconventional resources in North America. Given Oman’s challenging geology, the company appears to be a sensible fit.”
Oman awarded Block 36 to Allied Petroleum Exploration (Apex) in 2011. Apex brought in DNO International in September 2013. After shooting 1,000 km of 2D seismic and reprocessing 4,000 km of legacy, the partners drilled a first well in May 2016.
DNO withdrew, leaving Apex in control in early 2017. The company said it had identified a light tight oil play in the area, based on a discovery in a nearby block in late 2017. Apex estimated the size of this tight play to be more than 4,000 square km.
The Times of Oman has reported EOG struck a deal to acquire the block from Apex.