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Oman signs pact to develop Mukhaizna oil field

MUSCAT — Oman has signed agreements with a consortium of investors to enhance oil production expected to peak at 150,000 barrels per day (bpd) from Mukhaizna field. Investments worth several billions of dollars have been committed over the 30-year operational life of the project.

Dr Mohammed bin Hamed al Rumhy, Minister of Oil and Gas, signed the production sharing and joint operation agreements with the consortium partners - Occidental Mukhaizna, Shell Oman Trading Company, Liwa Energy (a subsidiary of Abu Dhabi-based Mubadala Development Company), Total E&P Oman, Partex (Oman) Corporation, and the state-owned Oman Oil Company (OOC).

The government of Oman will be entitled to 80 per cent of the revenue proceeds while the consortium members will share the remaining 20 per cent.

Production at Mukhaizna has so far been limited owing to heavy viscous crude and high operational costs. Thermal enhanced oil recovery (EOR) techniques will be deployed to extract one billion barrels of heavy crude from the field, which was discovered in 1975.

Occidental will be responsible for the operation of Mukhaizna having a hydrocarbon potential of two billion barrels of STOIP (stock tank oil in place). Occidental Oman, a subsidiary of the California-based oil giant, is the second largest producer of oil in Oman.