Record output from Mukhaizna heavy oil field in Q4 of 2016

By Conrad Prabhu — MUSCAT: MAY 7 - Production from the Mukhaizna heavy oil field — the focus of a mega steamflood project in central Oman — climbed to a record 133,000 barrels of oil equivalent (BOE) per day in the fourth quarter of last year, according to Occidental (Oxy Oman), the field’s operator. Oxy Oman has a 45 per cent interest in the Mukhaizna concession, also known as Block 53 and home to one of the world’s most viscous heavy oil reservoirs.  Oxy Oman assumed operatorship of the field in 2005 under a 30-year Production Sharing Contract (PSC) signed with the Omani government.

“By the end of 2016, Occidental had drilled more than 2,900 new wells and continued implementation of a major steamflood project,” the US-based upstream oil and gas producer said in its 2016 Annual Report. “In 2016, the average gross daily production was 127,000 BOE per day, including a record fourth quarter production of 133,000 BOE per day, which was approximately 16 times higher than the production rate in September 2005 when Occidental assumed operations,” it added. Significantly, Oxy’s Oman operations achieved record production highs in 2016, cementing its reputation as the largest independent oil producer in the Sultanate.

The company has interests in a total of four concessions in the Sultanate, in addition to operating these blocks.  Its share of production averaged 96,000 BOE in 2016.

Gross production from Block 9, which is also a major contributor to Oxy’s Oman output, averaged 94,000 BOE per day in 2016. An existing Production Sharing Contract conferring a 50 per cent interest to Oxy expired in December 2015.  Earlier this year, the company signed a 15-year Exploration and Production Sharing Agreement (EPSA) granting an extension to Oxy under modified operating terms.

Block 62, which is 80 per cent owned by Oxy, also commenced production in January 2016. The US based upstream operator was awarded the concession in 2008 under a 20-year contract, subject to declaration of commerciality.

The company is pursuing development and exploration opportunities focusing on the Block’s natural gas and condensate resources. Two years ago, Occidental signed a five-year extension for the initial phase covering a discovered non-associated gas area in the Block.

Rounding off Oxy’s Oman

assets is Block 27 where the company has a 65 per cent working

interest.

The contract expires in 2035.

Significantly, higher output from its Oman operations contributed to the company’s improved overall performance in 2016.

“Our worldwide oil and gas production was 602,000 BOE per day from ongoing operations in 2016, an increase of approximately 7 per cent from a year ago, and exceeded our guidance due to better-than-expected results in Permian Resources, improved performance at Al Hosn Gas in the UAE and the successful ramp-up of Block 62 in Oman,” Vicki Hollub, President & CEO — Occidental, stated.