Oman on target to award Block 7 by year-end

The government has been encouraging multinational oil companies to find new reservoirs in a move to sustain production levels

Block 7 is located in central Oman.
Block 7 is located in central Oman.

Oman is ‘on target’ to award an oil block by the end of the year, according to a senior official at the Ministry of Oil and Gas.

“We are on target. We are still hoping to sign (an agreement) very quickly, very soon,” Salim bin Nasser Al Aufi, the Undersecretary at the Ministry, told the Times of Oman, adding that the block identified for awarding is Block 7 in central Oman.

Asked if any other block will be awarded by the end of the year, Al Aufi said, “No more this year. This is it, and then we will have a strategy for next year.”

The official made the comments on the sidelines of the second Islamic Banking Knowledge Forum hosted recently by Bank Nizwa.

Earlier, Al Aufi had told the newspaper that with oil prices falling, multinational energy companies were either slowing down their investment in new concession areas in Oman or asking for much more ‘favourable’ terms.

The government has been encouraging multinational oil companies to find new reservoirs in a move to sustain production levels.

In September, it was announced that the ministry had signed a new exploration and production sharing agreement with Oman Lasso Exploration and Production Karwan.

Under the agreement, the company will explore oil and natural gas in Block 54, which covers an area of 5,632 sqkm and is located in Al Wusta Governorate.

During a panel discussion at the forum, Al Aufi said a hard truth is that crude oil price has dropped significantly and is unlikely to recover to what it used to be. He also referred to the issue of oversupply, saying that although the demand is growing, still there is more supply than demand.

The oversupply has ended up filling reserve tanks on the ground or floating tankers and is ready to come to the market, Al Aufi said, adding that there are also some challenges posed by shale oil.

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