Exploration & Production of Oil & Gas
Petrogas E&P LLC
Petrogas E&P LLC is the holding company for MB Holding Company’s Oil & Gas exploration and production activities in Oman and overseas, namely Petrogas LLC, operator of Block 7 in Oman; Mazoon Petrogas SAOC which holds a 50% interest in Block 5 in Oman and a 50% stake in the operator company Daleel Petroleum; and Petrogas Rima which holds a 75% interest and operates the Rima Cluster of Small Fields Service Contract awarded to Petrogas E&P by Petroleum Development Oman.
Petrogas E&P also holds a 30% interest in oil producing Area A, onshore Egypt, operated by Kuwait Energy Company, Eastern Desert. Petrogas, through its Indian project office, operated one offshore exploration concession in India and participated in two other blocks where Gujarat State Petroleum Corporation Ltd. is the operator. In these three exploration concessions in India, Petrogas held a 20% interest. These concessions are in process of being relinquished.
Petrogas E&P aims to maximize the return on investment from a managed portfolio of oil and gas assets. This primary goal will be achieved whilst protecting the health and safety of its employees and safeguarding the environment. The company seeks to continuously improve its management of HSE. Petrogas is also committed to contribute socially to the communities where it operates supporting local societies and contributing to appropriate education and development programmes.
Petrogas expects high standards of professionalism and ethics from its staff. It aims to have adequate human resources, policies, procedures and systems to manage its businesses successfully and sustainably. The recruitment, development and retention of high-calibre Omani staff are the key objectives towards a sustainable future. Petrogas also focuses on the professional development of its employees through various training and development programmes for their career growth.
Petrogas LLC (Block 7)
Petrogas LLC was established in January 1999, and in the same year acquired onshore Block 7 (Butabul concession, 100%) in Oman from Elf Petroleum and became the sole operator of the Block.
Since becoming the operator, Petrogas LLC has managed to minimise the decline in the field’s performance namely from 50% decline in the 4 years leading to 1999 to 7% per year and has successfully maintained production for the subsequent 13 years. Current (mid 2013) production is around 1,050 barrels of oil per day (bopd).
Mazoon Petrogas SAOC and Daleel Petroleum Company (Block 5)
Petrogas acquired Block 5, onshore Oman, from Japex in 2001 and subsequently introduced China National Petroleum Corporation (CNPC) as a joint venture partner. Petrogas E&P LLC interest in Block 5 is held through Mazoon Petrogas SAOC. Petrogas’ participation is at a ground floor level with a paying and revenue interest of 50%. Mazoon Petrogas SAOC is the Joint Operator of Block 5 through its 50% ownership in Daleel Petroleum LLC, the Operator of the block. Petrogas E&P LLC has seconded several key staff to Daleel Petroleum.
Block 5 is currently the most significant asset in the Petrogas portfolio in terms of reserves, production and expenditure. The asset has outperformed expectations and the joint venture has raised production levels from around 4,500 bopd in mid-2002 to some 42,000 bopd towards mid-2013. The production is expected to continue to rise to 50,000 bopd in the coming years.
New Business Development
In 2011, 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 75,000 bopd from operations by 2015.
(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, with a 75% working interest, 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 (mid 2013) production in the block is some 12,500 bopd. The project is a service contract with PDO, where costs are recovered from a percentage of produced oil over and above a specified declining baseline production. The contract is incentivized by a profit fee for production revenues above a contractually committed cumulative production target. Being a Service Contract, as per contract provisions, tax is applicable on profits. Oman Oil Company SAOC is a 25% partner in the venture.
Petrogas E&P India Project Office
In 2006, 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 had a 20% working interest, of which it operated one offshore block in the Mumbai Basin and successfully completed the drilling of 3 offshore exploration wells. These concessions are in the process of being relinquished, due to absence of commercial quantities of hydrocarbons.
Petrogas E&P acquired 30% equity in Area A block in Egypt in 2008. The block comprises of two exploration concessions and four development leases situated onshore along the western flank of Gulf of Suez, Egypt. Kuwait Energy Company (Eastern Desert) is the operator of the block with a 70% interest. The block comprises a number of mature fields and exploration prospects with a current (mid 2013) production of some 6,600 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 the Petrogas Corporate Structure
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