Oman to present sixth heavy oil block to investors soon: H E Aufi
Oman, which currently has five operational heavy oil blocks, is in the process of finalising details for the sixth heavy oil block and seeking a potential investor.
The sultanate is also finalising a development plan for Habhab oil field. Heavy oil is a term given to hydrocarbon reserves, which are difficult to explore and extract and require additional efforts to produce crude from.
Out of the five oil blocks, which are considered as heavy-oil blocks, four are maintained by Petroleum Development Oman while one is run by Occidental Oman.
While participating in a panel discussion at the inauguration of the World Heavy Oil Congress & Exhibition (WHOC) at the Oman Convention and Exhibition Centre on Monday, H E Salim bin Nasser al Aufi, Undersecretary of the Ministry of Oil and Gas said, “Despite ongoing concerns about the future demand for oil, Oman will continue to invest in heavy oil production.”
H E Aufi said that Oman may need much higher oil prices to maintain the budget. But he said that the country will continue to produce oil even if the prices touch a low of US$40 per barrel.
He said that the last bidding round launched by the Ministry of Oil and Gas had at least one block that can be considered as a heavy oil block.
“We are quite surprised by the interest we received for that particular block. We are currently finalising the details, which we believe will be potentially attractive for developers. We will announce the block as soon as these details are finalised. Besides this, we are also looking for a potential investor for Habhab oil field, which is also a very challenging field. The Ministry of Oil and Gas is currently finalising development for the block. As soon as the development plan is finalised, we will present it to investors,” H E Aufi explained.
He said that different recovery mechanisms are used in to recover heavy oil in Oman and it accounts between 15-20 per cent of the total crude produced by the sultanate.
On demand outlook for crude, H E Aufi said, “There is a challenge from shale oil which is putting pressure on global crude prices, but in terms of sheer volume heavy oil is dominating the world. Going forward, the production of heavy oil is going to increase further.”
“Oil will continue to have its place in global energy mix despite rising investments in renewable energy and natural gas production,” H E Aufi said.
He clarified that despite a likely increase in production volume of heavy oil, the global crude prices will continue to remain under pressure from the ongoing decrease in the cost of producing shale oil in the United States.