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Petrogas E&P LLC

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Petrogas E&P is the holding company for MB Holding Company’s exploration and production activities in Oman and overseas, namely Petrogas LLC, operator of Block-7 in Oman; Mazoon Petrogas SAOC which holds 50% interest in Block-5 in Oman and 50% stake in the operator company Daleel Petroleum. Also through its Indian project office, Petrogas E&P manages three exploration concessions, being operator in one. The company has added two more subsidiaries under its fold in 2007 -- Petrogas Malih which holds 50% interest in the Exploration Block 45 & 48 and Petrogas Rima (company formed in Jan’08) holding 75% interest in the Rima Small Fields Service Contract awarded to Petrogas E&P by Petroleum Development Oman. Finally, Petrogas E&P acquired a 30% interest in oil producing Area A, onshore Egypt, operated by Oil Search Eastern Desert.

Corporate Values
HSE is at the core of Petrogas values. The company seeks to improve its HSE systems and performance and always works within the laws, regulations and permits of the countries hosting its operations. Petrogas sees, appropriate attention to HSE and performance excellence, as pre-requisite to its business success. With more than 200 employees at the end of 2007, and a requirement for intensive recruitment to staff up its new subsidiaries and affiliates, the company sees its work force as its most valuable asset. Quality recruitment is perhaps the most critical factor in growing the company and a challenging one in the current tight employment market for the oil and gas professionals.

Training and development of Omani staff is seen as vital to secure a stable, experienced and motivated work force for the future. More than 70% of Petrogas staff is Omani. Petrogas also values the contribution of its international staff who shares their experience and know-how with their colleagues. Diversity and multi-disciplinary teamwork are seen as essential factors to maintain Petrogas’ drive for continuous improvement and growth.

Petrogas LLC (Block 7) 
Petrogas LLC was established in January 1999, and in the same year acquired Block 7 (Butabul) Oil and Gas concession in Oman from Elf Petroleum and became the sole operator of Block 7. 

Prior to acquisition of Block 7, the production was declining at a rate of 17% annually. Since Petrogas took over operations, the decline was arrested and the field continued to produce at around average of 2,000 barrels/day. After two years of operations, Block 7 reserves were substantially increased to reach 5 million bbls (proven) and 8.9 million bbls (proven + probable). Petrogas’ operations in 2007 were the highest ever with expenditure reaching US $90 million, most of it being Capex allocated to the drilling and completion of some 30 wells.

Mazoon Petrogas SAOC and Daleel Petroleum Company (Block 5)
In January 2001, Mazoon Petrogas SAOC acquired Block 5 (Wadi Aswad) oil and gas concession from Japex Oman and became the 100% owner and operator of Block 5. Subsequently the company sold its 50% rights in Block 5 to CNODC, a subsidiary of China National Petroleum Corporation (CNPC). The two shareholders then formed a joint venture, Daleel Petroleum Company, to operate Block 5. At the time of acquisition, Daleel oilfield had remaining reserves in the order of some 15 million bbls.

Since 2002, Mazoon Petrogas SAOC and CNPC have jointly invested over US$ 180 million in production enhancement projects, mainly in the implementation of water-flooding to increase production from 5,000 bpd to 35,000 bpd (production had reached 15,000 bpd on 1.1.2004). As a result, production increased from 4,759 barrels/day in June 2002 to the level of 15,135 barrels/day at the end of year 2005. The production is currently at around 18,000 bpd and planned to reach in excess of 26,000 bpd in 2011-12. Significant upside is present in the Daleel Natih reservoir that is under appraisal in future exploration elsewhere in the Block.

New Business Development
In 2004, Petrogas E&P LLC formed a new business development division to handle the evaluation and acquisition of new E&P assets. Evaluations covered assets not only within Sultanate of Oman but spanning a gamut of assets in various countries. The main regions considered outside Oman are the Middle East, Africa and India. In 2007 Petrogas bagged three exploration oil & gas blocks in India and acquired 30% stakes in area A, Eastern desert, Egypt. In 2008, Petrogas was awarded operations of small fields in Oman.

Petrogas E&P is on the lookout for the acquisition of oil and gas concessions with potential for exploration and development as operator and/or partner with national and/or international companies, to develop hydrocarbon resources. The ultimate goal for Petrogas E&P is to reach 100,000 bpd from operations by 2010. 

Petrogas Malih (Block 45 & 48)
Petrogas Malih was established in November 2007 to farm-in for a 50% interest into Blocks 45 and 48, Oman. As per the farm-in terms, Petrogas will drill the first two wells on behalf of Maersk (operator). Block 48 is along trend from Block 7 fields and contains the Malih-1 oil and gas discovery made by PDO in 1984. Reservoirs in the area are in Gharif, Khuff and Shuaiba. The drilling of the first well to appraise and production test the Malih discovery is planned in the second half of 2008.

Petrogas Rima
(Rima satellite cluster of Small Fields)
Petrogas Rima was established at the beginning of 2008 to manage and operate the Rima Satellite Cluster of Small Fields on behalf of PDO. The area covers approximately 1500 sq km of PDO’s Block 6 and includes nine producing fields and nine unconnected single-well discoveries. Current production is 2000 bopd of an average 25°API. The project is a service contract with PDO, where cost-recovery and profit depends on oil production being maintained above a baseline and a tendered production profile for the first five years. Oman Oil Company SAOC is a 25% partner in the venture.

Petrogas E&P India Project Office
Petrogas E&P was awarded (under NELP VI) three exploration blocks in India as a part of three consortia. In all the three blocks, Petrogas has a 20% working interest and it is the operator for the Block MB-OSN-2004/2, with GAIL (India) Limited, Hindustan Petroleum Corporation Limited, Gujarat State Petroleum Corporation and Indian Oil Corporation as non-operating partners.

Egypt
Petrogas E&P recently acquired 30% equity in Area A block in Egypt. The block comprises of two exploration
concessions and four development leases situated onshore along the western flank of Gulf of Suez, Egypt. Oil Search is the operator of the block with a 70% interest. The block comprises a number of mature fields and exploration prospects with a production of some 3000 bopd. It is a service contract with GPC, Egypt whereby the contractor is paid a service fee against incremental production above a designated baseline.

For more information, visit www.petrogasllc.com

 

 
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