MedcoEnergi expands presence in Oman’s upstream energy sector

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MUSCAT: Indonesian oil and gas firm PT Medco Energi Internasional Tbk (MedcoEnergi) has described stake acquisitions in two key hydrocarbon blocks in the Sultanate of Oman as a “significant milestone” for the state-owned company.

MedcoEnergy saw its presence in Oman’s upstream sector ramp up dramatically late last year when it successfully acquired a 20 per cent stake each in Blocks 48 and 60, owned and operated by OQ Exploration and Production (OQ EP), the upstream arm of Omani energy group OQ.

“After a successful 17-year presence in Oman, MedcoEnergi expanded its portfolio with the acquisition of two 20 per cent interests in onshore exploration and production sharing agreements (EPSAs) from OQ Exploration & Production LLC. The producing Block 60 and the exploration Block 48 are located in western Oman near the Saudi Arabian border. Block 60 provides an immediate uplift in production and both blocks offer significant oil and gas resource potential,” the company stated in its 2023 Annual Report.

Prior to the stake acquisitions, MedcoEnergi’s presence in Oman was limited to two assets: Karim Small Fields (within PDO’s concession), and Block 56. MedcoEnergi holds a 58.5 per cent operating interest in the Karim Small Fields Service Contract. As part of its remit, MedcoEnergi is providing infill drilling, workover and thermal enhanced oil recovery services to maintain production from 20 fields within the cluster. Oil production averaged 13 million barrels of oil per day (mbopd) in 2023.

In the onshore Block 56, MedcoEnergi holds a 5 per cent interest. The exploration period was successfully extended by one year to the end of 2024 following the commitment of an additional exploration well.

Marking a “significant milestone” for the company are last year’s stake acquisitions in Blocks 48 and 60. “(The acquisition) delivers immediate production uplift, unlocks future exploration potential, and expands the Company’s geographic footprint in a strategically important region. The partnership with OQ Exploration & Production further strengthens MedcoEnergi’s position, leveraging their expertise and established presence in Oman,” MedcoEnergi stated.

Block 60, covering 1,485 km2, currently produces approximately 63 million barrels of oil equivalent per day (mboepd) from the Bisat oil and Abu Butabul gas and condensate fields. “This translates to an additional net 12.6 mboepd production to MedcoEnergi,” said the Indonesian company. “The EPSA expires in 2048 and the block has substantial undeveloped discovered gas resources.” Likewise, Block 48, covering 2,995 km2, also holds significant potential for further Oil & Gas discoveries, according to the company. “The Block 48 EPSA is in the second phase of the exploration period and extends until the end of 2025, with a commitment to acquire a new 3D seismic. Although non-operated, MedcoEnergi will be actively involved by seconding experienced personnel – senior staff and technical experts well-versed in gas development, production, technology, and sustainability – to support the asset.” The parent group currently has interests in 15 oil and gas properties in Indonesia, as well as 12 international properties in Thailand, Oman and Yemen. Total oil and gas production was 160 mboepd in 2023, comprising 80 per cent gas and 20 per cent liquids.