Masirah Oil Limited (MOL), the 100 per cent license owner and operator of the only producing oilfield off the Sultanate of Oman’s east coast, says it plans to ramp up drilling in its Block 50 concession around Masirah Island, primarily with a goal to bolster reserves and capitalize on currently sky-high oil prices.
The company said in a statement that a two-well drilling campaign is planned to kick off soon after the khareef (monsoon) season, which ends at the end of August. While one well is aimed at ascertaining the outer boundary of the Yumna field – currently the only producing field in Block 50 – the other well will target potentially promising prospects elsewhere within the block.
“Preparations for a targeted drilling campaign after the monsoon season have started,” Masirah Oil stated. “Selection of a drilling rig contractor to drill one firm well and one optional well is ongoing. The first well will establish the eastern extent of the Yumna field. Then this well will be potentially deepened to test a major prospect within the Khufai carbonate (a proven producer from other concessions onshore of Oman). If the Khufai prospect is proven to be commercial, it can be produced at very low cost from the existing Yumna field facilities.”
The second well, which is yet to be firmed up, is proposed to be an exploratory well targeting “several significant prospects”, the company noted. To further exploit new opportunities identified through the reinterpretation of data, a 3D seismic survey covering 15 sq km using ocean-bottom-nodes is expected to start later this month.
The new campaign will build on what has been a positive year for Masirah Oil in 2021, buoyed by higher global oil prices. The addition of two new production wells last year, to the existing Yumna-1 well, helped boost output from the field. Oil liftings increased to a total of 12 during 2021, up from seven in 2020. There was also a significant improvement in the average realized oil price from $34 per barrel in 2020 to $67 per barrel in 2021.
Further, in preparation for a new phase of enhanced output from the block, Masirah Oil has replaced its floating storage tanker with a new, larger capacity vessel that will also not require any dry-docking maintenance for a number of years. At the same time, the existing Mobile Offshore Production Unit (MOPU) is being replaced with an upgraded facility to allow for greater liquid handling capacity, according to the company.
Singapore-based oil and gas corporation Rex International Holding, which has a 91.81 per cent stake in Masirah Oil through its Omani subsidiary Rex Oman, says buoyant oil prices bode well for the company’s outlook.
Dan Broström, Executive Chairman of Rex, commented: “Our key focus is to increase production and reserves. With Brent oil price presently above $120 per barrel and increased market demand for oil under current economic and geo-political circumstances, it makes more sense to invest in our existing assets for higher realization of cash flow in the near term than to procure new assets at high valuation.”
