Conrad Prabhu -
Muscat, Jan 4 -
Block 8, located off Oman’s Musandam Peninsula, has generated revenues totalling around $1 billion to the Sultanate since it came into production in 1994, according to the head of the offshore concession’s outgoing operator.
Bjørn Dale, Managing Director of DNO SA — the Norwegian-based international oil and gas firm — said the Block — home to the Sultanate’s only offshore producing fields of Bukha and West Bukha — will continue to deliver value to Oman well into the future.
“Since inception, Block 8 has produced 35 million barrels of oil and 285 billion cubic feet of gas, generating the Sultanate of Oman about $1 billion in total revenues,” said Dale.
The revelation came during the formal handover of Block 8, which has been operated by DNO (with a 50 per cent equity interest in partnership with LG International of South Korea owning the remaining 50 per cent) to Musandam Oil & Gas Company (MOGC), a wholly owned subsidiary of Oman Oil Company Exploration and Production (OOCEP) which in turn is the upstream arm of Oman Oil Company (OOC). The handover marks the conclusion of the existing 30-year Exploration and Production Agreement (ESPA) for the Block, which expired at midnight on January 3, 2019.
Besides being the first offshore producing concession, Block 8 has strategic significance for the development of Musandam Governorate. Associated gas and liquids from the Bukha and West Bukha fields are channelled to the Musandam Gas Plant, currently in operation at Tibat in Musandam Governorate.
Part of the processed gas is supplied to an adjoining 120MW gas-fired Independent Power Project — the first in the governorate — which came into operation in 2017. A new offshore export terminal built off Tibat also enables the export of Omani crude and liquids via tanker to international markets.
Salim bin Nasser al Aufi, Under-Secretary of the Ministry of Oil & Gas, was the Chief Guest at the handover ceremony held at Al Bustan Palace on Thursday.
Also present were high-level officials of the ministry, DNO SA, LG International, OOCEP and its new subsidiary MOGC. The latter takes over the licence to operate and manage Block 8 with immediate effect.
Speaking at the ceremony, DNO’s Bjørn Dale said: “The offshore Block 8 licence has a long history in Oman, going back all the way to the original grant in 1985. Production eventually started in 1994. Over the 34 years of history, many professionals have worked together to safely explore, develop and produce hydrocarbons in Block 8. I’m pleased to note the strong health, safety and environmental performance of operations with no Loss Time Injuries (LTI) for a significant period of time.”
“Although the licence is expiring for DNO and LG International, the Block will continue to deliver value for the future for Oman, through this handover to the new operator,” said the official. “We recognise that a significant amount of work has been accomplished in a very short timeframe to be able to successfully hand over Block 8 and we would like to thank all those involved in OOCEP and MOGC.”
With its departure from Block 8, DNO effectively exits the Sultanate’s upstream energy sector, having in its heyday owned as many as four licenses. Elsewhere in the Middle East, the company produces around 125,000 barrels per day of crude from the Kurdish region of Iraq. DNO also has a strong presence in Norway and the United Kingdom.
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