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Eni's first deepwater well in Oman's Block 52 turns up dry: oil minister

Highlights

Second well planned on Block 52: Oman's Rumhy

Additional LNG export facilities under consideration

Third train at Khazzan-Ghazeer project commissioned

Eni's first deepwater exploration well in Oman's Block 52 was dry, but the Italian company is preparing to drill a second well on a new target, Mohammed Al-Rumhy, Oman's minister for oil, told S&P Global Platts.

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"[Regarding the] offshore project, the first well was unfortunately unsuccessful. But there are many other structures and Eni is looking at those structures with a plan to drill next year," said Rumhy. "But Eni also has an onshore block, we are looking at drilling exploration wells onshore as well."

Eni did not immediately respond to a request for comment.

The Italian energy group signed an Exploration and Production Sharing Agreement (EPSA) for Block 52, located offshore southern Oman, in 2017, following an upstream licensing round in 2016. The ownership structure consists of Eni with a 55% stake and operatorship, Qatar Petroleum with 30%, and Oman's state-owned OQ with 15%.

The block is in an under-explored area, spanning 90,000 square km, with water depths ranging up to 3,000 meters.

In 2019 Eni expanded its presence onshore, picking up working interests in Block 47, and also Block 77 in a 50-50 partnership with BP.

In recent years Oman has attracted several international majors, including Shell, BP, Thailand's PTTEP and Malaysia's Petronas to invest in upstream projects. They are mostly natural gas prospects, although the sultanate is currently in a gas surplus.

Options to utilize any additional gas production resulting from these projects is under consideration, Rumhy said.

"We have a few blocks with various serious explorers -- one with Shell, one with Total, one with Eni -- and if they are successful we may go back to LNG as a good option to monetize their findings," said Rumhy. "If the quantity is large, we may have to expand."

This could mean building additional Oman LNG export facilities, Rumhy added.

Oman currently consumes over 470 million boe/d of natural gas, and has been in surplus since September 2017, when the BP-operated Khazzan gas field came on stream and ramped up production to 1 Bcf/d.

Omani LNG exports were essentially at full capacity 2018-2020, when they averaged about 12 Bcm/year. Over the last two years, Oman has been conducting de-bottlenecking operations at their Oman LNG facility, which will allow Omani LNG exports to expand by about 2 Bcm/year. Platts Analytics expects Omani LNG exports at around 14 Bcm/year over the coming five years.

The surplus means juggling which fields are put into production in the sultanate.

The third train at the BP-operated Khazzan gas project, which is known as Ghazeer, has recently been commissioned. It is likely to be placed on stream because it is known to produce condensate as well as natural gas. However, this will mean other assets would need to be closed, Rumhy said.

"It has nearly 15,000 b/d to 20,000 b/d of condensate. We have the option of closing down our dry gas wells and opening the wet gas wells," said Rumhy. Condensates are exempt from the OPEC production quota.

Khazzan and the two Ghazeer trains combined have a production capacity of 1.5 Bcf, although there is scope to increase this, Rumhy said.

"With some tweaks BP thinks it can produce a little bit more," said Rumhy. "Maybe 100 million standard cubic feet per day extra for each train."