By A Staff Reporter -
MUSCAT — Australian-based international oil firm Oilex Ltd and its joint venture partners in Block 56 have decided to relinquish their interests in the onshore concession in south Oman.
The decision to relinquish Block 56, which has been made in accordance with the Exploration and Production Sharing Agreement (EPSA), follows a detailed review of the prospectivity of the Block following exploration activities conducted over the past four years, the Perth-headquartered oil firm said at the weekend.
.“On behalf of the Block 56 Joint Venture, Oilex Oman Limited (as Operator) will proceed to close down Joint Venture activities to the mutual satisfaction of the Ministry of Oil and Gas (MOG) and the Joint Venture at the earliest reasonable date.
The Joint Venture appreciates the co-operation of the MOG that has been extended in this regard. The amount the Joint Venture has incurred on exploration and appraisal activities to date is in excess of the amount required to be expended under the EPSA,” it added.
The Government of the Sultanate of Oman awarded the block to the Joint Venture in 2006 with the EPSA signed on June 28 of that year. Three small discoveries were made in Block 56 arising out of the subsequent work programme that was completed (Sarha-1, Ghadaq-1, Al Jumd-1). The Joint Venture has determined that those discoveries are not commercial to develop under the terms of the EPSA due to their small field size or heavy oil characteristics.
In recent months the Joint Venture said it closely reviewed the remaining prospectivity of Block 56. It determined that the exploration plays have been adequately tested and that further exploration activities are not commercially justified on the basis of prospect size and likely oil type.
Following discussions with the Ministry of Oil and Gas, the joint venture formally notified authorities of their intention to voluntarily relinquish Block 56.
The participating interests in Block 56 were as follows: Oilex Oman Ltd (Operator) — 25 per cent; Videocon Industries Limited — 25 per cent; GAIL (India) Limited — 25 per cent; Bharat Petroleum Corporation Limited — 12.5 per cent; and Hindustan Petroleum Corporation Limited 12.5 per cent.
Oilex said its decision to relinquish Block 56 was consistent with its increasing focus on its onshore assets in India, its offshore exploration acreage in the North West Shelf of Western Australia and new ventures opportunities in India and South East Asia.
Oilex currently has interests in three field re-development and exploration projects in India; two exploration permits offshore Australia; one production sharing contract in the Joint Petroleum Development Area between Timor-Leste and Australia; and one production sharing contract onshore Sumatera Indonesia. Oilex is the operator of joint ventures comprising major Indian energy companies in all areas save for Indonesia. In Indonesia Oilex is non-operator in a joint venture with an Indonesian company.