OQEP pledges continued investment in hydrocarbon sector
Published: 06:09 PM,Sep 27,2024 | EDITED : 10:09 PM,Sep 27,2024
Oil, gas and condensate production from OQEP’s operated and non-operated assets averaged 249,000 barrels of oil equivalent per day in 2023
MUSCAT: OQ Exploration and Production (OQEP) – the upstream arm of Oman’s integrated energy group OQ – says it intends to continue to invest in hydrocarbon exploration and production activities, as well as boost its already sizable portfolio of operated and non-operated assets in the country.
The pledge comes as OQEP prepares to offer 25 per cent of its capital for public subscription via an Initial Public Offering (IPO) on the Muscat Stock Exchange (MSX), which launches next week.
“The Company believes that substantial investments in the oil and gas industry continue to be required to meet future global demand, and that there are attractive opportunities to further grow production and expand its base profile in Oman,” OQEP noted in its prospectus.
“It therefore intends to continue to invest in a sustainable manner in continued hydrocarbon exploration and production through oil price cycles to maintain a reserves replacement ratio at or above the industry standard of 100 per cent and believes that its focus on declining unit total costs and low carbon intensity position it to benefit from these investments,” it further stated.
To this end, it intends to maintain a gas reserves portfolio contribution of more than 50 per cent in barrels of oil equivalent (boe) terms. This will necessitate the expansion of its gas reserves through the exploration of new fields, new reservoir additions in existing fields and the reassessment of existing reservoirs and fields, it said.
In Block 60, its flagship asset, OQEP currently has four rigs undertaking drilling activities, including three that are drilling at the producing Bisat field and the other undertaking oil and gas exploration drilling activities.
“In 2025, the Company intends to add a further rig to increase production at this contract area. The Company is also engaged in ongoing discussions with stakeholders to access new acreage to develop new resources and expand production, leveraging the existing Block 60 facilities and the Company’s operational excellence,” OQEP stated.
In one such initiative, the capacity of the Bisat processing facility will be expanded to 850,000 barrels of water and 65,000 bpd of oil, which is expected to become operational in July 2025. Envisioned in the next phase is a further potential expansion of its overall processing capacity to a total of 1,200,000 barrels of water and 100,000 bpd of oil.
Other key producing assets include Blocks 61, 9, 10, 53 and 65 – a mix of operated and non-operated concessions. Block 61, with a 30 per cent working interest held by OQEP, currently accounts for a third of Oman’s gas production. In June 2024, it equated to a daily working interest production averaging 17,800 bpd of oil and condensate, and 487.2 mmscf/d of gas from the BP operated block.
The Oxy-operated Block 9 in northern Oman, with OQEP holding a 45 per cent working interest, accounts for around 10 per cent of the country’s total oil production. In June 2024, the company’s daily working interest production from Block 9 averaged 40,800 bpd of oil and condensate and 53.2 mmscf/d of gas.
Oil, gas and condensate production from OQEP’s operated and non-operated assets averaged 249,000 barrels of oil equivalent per day in 2023, corresponding to its working interest. This accounted for a 14 per cent share of Oman’s combined hydrocarbon output in 2023.
Further, in a bid to boost its upstream portfolio, OQEP is weighing investments in a number of open blocks currently available in Oman through potential partnerships with blue-chip international energy firms, it added.
The pledge comes as OQEP prepares to offer 25 per cent of its capital for public subscription via an Initial Public Offering (IPO) on the Muscat Stock Exchange (MSX), which launches next week.
“The Company believes that substantial investments in the oil and gas industry continue to be required to meet future global demand, and that there are attractive opportunities to further grow production and expand its base profile in Oman,” OQEP noted in its prospectus.
“It therefore intends to continue to invest in a sustainable manner in continued hydrocarbon exploration and production through oil price cycles to maintain a reserves replacement ratio at or above the industry standard of 100 per cent and believes that its focus on declining unit total costs and low carbon intensity position it to benefit from these investments,” it further stated.
To this end, it intends to maintain a gas reserves portfolio contribution of more than 50 per cent in barrels of oil equivalent (boe) terms. This will necessitate the expansion of its gas reserves through the exploration of new fields, new reservoir additions in existing fields and the reassessment of existing reservoirs and fields, it said.
In Block 60, its flagship asset, OQEP currently has four rigs undertaking drilling activities, including three that are drilling at the producing Bisat field and the other undertaking oil and gas exploration drilling activities.
“In 2025, the Company intends to add a further rig to increase production at this contract area. The Company is also engaged in ongoing discussions with stakeholders to access new acreage to develop new resources and expand production, leveraging the existing Block 60 facilities and the Company’s operational excellence,” OQEP stated.
In one such initiative, the capacity of the Bisat processing facility will be expanded to 850,000 barrels of water and 65,000 bpd of oil, which is expected to become operational in July 2025. Envisioned in the next phase is a further potential expansion of its overall processing capacity to a total of 1,200,000 barrels of water and 100,000 bpd of oil.
Other key producing assets include Blocks 61, 9, 10, 53 and 65 – a mix of operated and non-operated concessions. Block 61, with a 30 per cent working interest held by OQEP, currently accounts for a third of Oman’s gas production. In June 2024, it equated to a daily working interest production averaging 17,800 bpd of oil and condensate, and 487.2 mmscf/d of gas from the BP operated block.
The Oxy-operated Block 9 in northern Oman, with OQEP holding a 45 per cent working interest, accounts for around 10 per cent of the country’s total oil production. In June 2024, the company’s daily working interest production from Block 9 averaged 40,800 bpd of oil and condensate and 53.2 mmscf/d of gas.
Oil, gas and condensate production from OQEP’s operated and non-operated assets averaged 249,000 barrels of oil equivalent per day in 2023, corresponding to its working interest. This accounted for a 14 per cent share of Oman’s combined hydrocarbon output in 2023.
Further, in a bid to boost its upstream portfolio, OQEP is weighing investments in a number of open blocks currently available in Oman through potential partnerships with blue-chip international energy firms, it added.