Oman Oil Company Exploration & Production (OOCEP), the upstream arm of government-owned Oman Oil Company (OOC) is planning to invest US$1.1 billion in the development of the gas-rich Abu Butabul discovery in its newly acquired Block 60 concession in central Oman according to the Omany Daily Observer.
This initial investment amount is part of an ambitious phased project  to extract the from the promising reserves of tight gas and condensates in Block 60. OOCEP is working along a tight deadline to bring the field into commercial production by setting the first quarter for 2013 to achieve this. The project is targeting a peak production output of 90 million standard cubic feet per day (mmscf/d) in order meet Oman’s increasing demand for gas in power generation, water desalination and as feedstock for petrochemicals industries.
OOCEP signed an Exploration and Production Sharing Agreement (EPSA) for Block 60, five months after previous operator BG Group of the UK left the concession. Mohammed bin Hamed al Rumhy, Oman’s Oil and Gas minister and Salim bin Zahir al Sibani chief executive officer of OOCEP signed the pact.
Al Sibani told reporters that the concession would be developed in two phases. Phase 1 will target the southern part of the block in particular the Abu Butabul field – first discovered in 1998 – which will be the first to be developed. Around $1 billion will be invested in harnessing the unconventional gas reserves of the field over a two-year period, the Observer reported.
The CEO commented on the length of Phase 1 of the project saying that: “We have a one year timeline from today’s concession signing to come up with the Field Development Plan. While we are continuing with the appraisal and drilling done in the past by BG Group, we will come up with a Field Development Plan within one year, which will then be submitted to the Ministry for approved. Once sanctioned, we hope to make a declaration of commerciality. From this declaration of commerciality, we have almost another year for commercial production. So, you can see, we are on a very stringent and challenging timeline.”
The second phase of the project will see OOCEP drill at least two exploration wells in the northern portion of the nearly 1,500 square kilometre concession area in addition to building supporting infrastructure for the project to help feed the gas into the government gas grid.
“We will put in place gathering systems, pipeline network, flowlines, wells, gas processing station, compression station, as well as a pipeline that will take the gas all the way to Barik station, some 85 kilometres away. In addition to this elaborate gas infrastructure, there will also be investments in camp facilities and roads leading to the block and within it as well,” Block 60’s manager Salam al Shidi told the Observer.Â
He said that development of Abu Butabul field is planned in three stages. In the first stage, OOCEP will aim for 90 mmscf/day with the following stage seeing a 50 mmscf/day ramp-up in production, the final stage will see this output on a sustained plateau. If stage 1 of the development does not meet expactations, the company will decide to maintain an overall 90 mmscf/day output.
Throughout Abu Butabul’s development, Al Shidi described how dozens of wells would be drilled in each of the three stages with the ultimate goal of converting these vertical wells into horizontal well drilling in order to extract more gas more cost-effectively.
