Muscat - Norwegian oil and gas operator DNO has spudded its first exploration well in Block 36 in the southwestern part of the Sultanate, marking the start of an energetic exploratory effort targeting this promising concession in the prolific Rub Al Khali basin. The Hayah-1 exploration well was spudded last month, the company stated in a report of its financial and operational performance for 2015 covering all its licenses in the Middle East and North Africa region, including Oman. DNO has a 75 per cent participating interest in the 18,000 sq km concession, which it acquired in 2013 via a farm-in agreement concluded with the previous operator, Allied Petroleum. The latter holds the balance 25 per cent.
Attention however has been primarily focused on its flagship Block 8 offshore Musandam Governorate, where the company operates Oman's only offshore producing fields. Gross production from the Bukha and West Bukha offshore fields totalled 8,193 barrels of oil equivalent per day (boepd) last year, down from 15,678 boepd in 2014. Among the factors blamed for the decline are well-failure and a lack of new drilling activity. Produced volumes from Block 8 in 2015 were 3.0 million barrels of oil equivalent (MMboe). Cumulative field production at end-2015 was 86.8 MMboe. As part of efforts to boost oil and gas production from the West Bukha field, DNO is weighing plans to drill an additional well, the company said.
Output from Block 8 comprised a roughly 50-50 mix of oil and gas in 2015. While the oil is sold to multiple buyers through a bidding process, the gas and LPG is lifted by a single customer. Oil sales accounted for roughly 95 per cent of the company's total revenues, with the rest generated by gas and LPG sales last year. As of December 31, 2015, gross 2P (proven and probable) reserves within Block 8 have been estimated at 4.0 million barrels (MMbbls) of oil, condensate and other liquids, as well as 8.4 billion cubic feet (bcf) of marketable natural gas (1.5 million barrels of oil equivalent). Of this total volume, 2.7 million barrels of oil equivalent is net to DNO on a company working interest (CWI) basis.
Over the past year DNO has seen its portfolio of Oman assets halved to just two licenses -- Block 8 and Block 36. This follows the relinquishment of Block 30 and Block 31 as part of an ongoing "consolidation and rationalization" of its portfolio, it said. In the MENA region, DNO also has production and exploration assets in Kurdistan and Yemen, as well as exploration assets in Tunisia, Somaliland and the United Arab Emirates.
© Oman Daily Observer 2016
