Oman to hold new oil and gas licensing round soon

Oct 22, 2007 02:00 AM

The Ministry of Oil and Gas is preparing to launch a new licensing round for oil and gas exploration covering a number of onshore and offshore blocks, Dr Mohammed bin Hamed al Rumhy, Minister of Oil and Gas, has said. The move is part of a concerted, ongoing effort by the government to further develop the Sultanate's hydrocarbon potential, and to bring on board new oil and gas reserves necessary to fuel the country's future economic growth.
"We are preparing new blocks; we hope to invite (prospective) companies in the coming weeks, perhaps as early as next week," Dr Al Rumhy said. "Right now we are preparing the data. Hopefully before the end of November, we will have a round of invitation to bid for the new blocks -- both offshore and onshore. And if everything goes according to plan, we should be in a position to sign the concession agreements early next year," he added.

Around 20 international companies are currently exploring for oil and gas around the country, the minister said, stressing that the Sultanate continues to provide an attractive investment environment for oil exploration firms. Hydrocarbon exploration is open to all countries and not limited to Western firms, he said, noting that Japanese, Korean, Chinese, Indian, Thai, Vietnamese and other Asian parties too have evinced interest in oil and gas based investment in the Sultanate.
Commenting on Oman's efforts to boost oil production, Dr Al Rumhy said that output is projected to increase gradually with effect from 2008, coinciding with the start-up of a number of new projects. Significant increases in output are envisaged in 2009 and beyond, as new oilfield projects, notably at Harweel, Mukhaizna and Qarn Alam, come on stream, the minister said.

Asked about progress in plans for the development of a major oil refinery in Duqm in the Wusta region, Dr Al Rumhy stated: “We are studying (the issue). The studies are not yet completed. We are looking at establishing potentially another refinery to support petrochemical projects. But we are really at a very early stage. Anything can happen.”
“There are so many challenges now: the biggest challenge is the current cost escalation in construction of big plants. It may be a deal-breaker if the cost escalation continues. The economics of such huge petrochemical plants are doubtful because of cost escalation.”

Source: Oman Daily Observer
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