OQEP plans to exit three upstream blocks in Oman

MUSCAT: Wholly Omani state-owned upstream energy firm OQ Exploration and Production (OQEP), which is preparing to shortly go public via one of the biggest public subscriptions on the Muscat Stock Exchange (MSX), says it will relinquish its interests in three non-operated oil and gas concessions in the Sultanate of Oman.

OQEP – the upstream energy arm of Oman’s global integrated energy group OQ – is offering 25 per cent of its capital, representing two billion shares, via an Initial Public Offering starting from September 30, 2024. With investments in a portfolio of 14 oil and gas assets, OQEP currently ranks among the biggest contributors to Oman’s hydrocarbon output, averaging 249,000 barrels of oil equivalent per day (boe/d) in 2023 – representing around 14 per cent of total oil, gas and condensate production that year.

However, targeted for relinquishment are the non-operated blocks 52, 30 and 62, none of which has yielded any commercial discoveries to date. “For certain non-operated blocks, no discoveries have been made, and consequently, pursuant to the terms of the relevant Exploration & Production Sharing Agreements (EPSA), the participants have notified the Government of their intention to relinquish the contract area. In addition, for certain contract areas, exploration or development activities are ongoing, but the Company has decided to exit the contract area,” OQEP noted in its IPO prospectus.

Of the three blocks identified for relinquishment, the most notable is the deepwater offshore Block 52 located off Oman’s southeastern coast. Italian based energy giant Eni acquired the block in 2017 with an 85 per cent working interest and operatorship, while OQEP held the remaining 15 per cent interest. In 2019, Qatar Petroleum purchased a 30 per cent working interest from Eni. Following their inability to unearth any commercial discoveries, the participants notified the government of their intention to relinquish the contract area, which they expect to be completed in 2024, said OQEP.

Also prepped for relinquishment is the gas concession Block 30 in northern Oman. OQEP holds a 27.14 per cent interest, while Oxy is the operator with a 72.86 per cent interest. According to OQEP, development options for the contract area are currently being assessed, but the company has agreed in principle to exit Block 30.

Likewise, Block 62, located adjacent to Block 30, is a gas contract area in central Oman operated by Oxy with an 80 per cent interest. OQEP holds the remaining 20 per cent interest. “The Company has agreed in principle to exit Block 62 (together with Block 30) and is awaiting Government approval,” OQEP added.