Maha Energy set to win Mafraq heavy oil field and Oman Block 70

Maha Energy said that it is set to be awarded a new onshore exploration block – Block 70 in Oman that includes the Mafraq heavy oil field from the Omani Ministry of Energy and Minerals.

According to the Swedish oil and gas company, Mafraq is a shallow undeveloped field.

Block 70 is located in the middle of the oil-producing Ghaba Salt Basin in Central Oman.

Discovered by Petroleum Development Oman (PDO) in 1988, the Mafraq oil field was delineated further by four wells and 3D seismic in stages until 2010.

A couple of wells were put on pump production tests, of which one was placed on an extended test for proving long term productivity, said Maha Energy.

The Mafraq heavy oil field is estimated by third parties to hold 185 – 280 million barrels of original oil in place (OIP).

Jonas Lindvall – President and CEO of Maha Energy said: “The fact that PDO did not develop this asset is by no means a reflection of the quality of the asset, it just reflects the reality of constrained resources and project ranking.”

Maha Energy, through a fully-owned subsidiary, will be the operator of the Omani onshore block and will have a 100% working interest.

The Swedish oil and gas company said that its foray into Oman marks a milestone for its diversification strategy.

Agreement for Oman Block 70 is slated to be signed on 1 October 2020 and is further subject to a Royal Decree.

Jonas Lindvall said: “To be allowed an opportunity to explore and develop the Mafraq oil field is an exceptional opportunity to add value to Maha and the people of Oman.

“The Mafraq oil field contains significant amounts of oil and previous and extensive pump tests has proven the productivity of the field.”

Oman Block 70 is spread over an area of 639 km2 and is covered by 2D as well as 3D seismic data that were acquired by previous operators and made available to Maha Energy.

So far, eight wells were drilled within the boundary on the Omani onshore block, five of which are on the Mafraq heavy oil field.

The Swedish upstream company revealed that the exploration and production sharing agreement (EPSA) for Block 70 comes with an initial exploration period of three years with an optional extension period of an additional three years.

If a commercial oil or gas discovery is made, then the EPSA can be converted into a 15-year production license which can be extended for an additional five years. Furthermore, the Oman Government Oil Company will have a right to acquire up to a stake of 30% in Block 70 by refunding the pro rata share of past expenditure.

Maha Energy said that the initial work commitments during the first period include geological studies, seismic reprocessing, and well commitments.