Petronas keen to invest in Oman's energy sector

April 19, 2009

Malaysia-based oil and gas giant Petronas is keen to explore investment opportunities in Oman's energy sector, according to a highly placed company official.

Datuk Abdullah Karim, Vice-President of Petronas, said the corporation was open to investment opportunities not only in hydrocarbon exploration and production (E&P) activities, but also in other areas of the Sultanate's energy industry.
""Petronas is an integrated energy company. We are into LNG (liquefied natural gas), petrochemicals, refining, and E&P. Hopefully there are opportunities not only in E&P.
Apart from the very close relations between Petronas and companies (in Oman), there are also close relations with the Government of Oman. We are eagerly looking to start work here in Oman,"" Datuk Abdullah Karim said in comments to the Observer.
On Wednesday, Petronas signed an exploration and production sharing agreement with the government for Block 63, marking the energy heavyweight's maiden foray into the Sultanate's hydrocarbon sector. ""I'm happy that finally we are able to have a Block to explore and develop. And I'm confident that, with the encouragement and guidance of the Omani government and our partners, we will be able to develop the block's hydrocarbon potential,"" Karim said.
Under the agreement, Petronas Carigali Sdn Bhd, the exploration and production arm of Petronas, will explore for gas in the 3,709 sq km block (also known as the Natih/West Raba concession) in the west of the Sultanate.
The company has established an unincorporated joint venture with two wholly Omani firms -- the government-owned energy investment vehicle Oman Oil CompanyOman Oil Company, and Industrial Petrochemicals LLC. Datuk Abdullah Karim, who is also CEO and MD of Petronas Carigali Sdn Bhd, said the company was keen to get started with the appraisal of Block 63's gas potential. ""We know there is gas. It's been discovered before, but the volumes will have to be determined.
To determine, we will have to do appraisals, drill wells and confirm that the volume is good, in order to make the development viable. At the same time, there are other prospects that are not explored yet, which we know from the seismic and we hope to drill exploration wells in these prospects.
So based on the appraisal of the existing discovery, and also the new prospects, we will develop the field as a whole and produce gas. ""Petronas aims to deploy some of its formidable expertise in oilfield development in unlocking the gas potential of Block 63. ""We in Petronas are exposed to big and small fields, and new and old fields.
In Malaysia, we are operating fields that are 30-40 years old, and through good reservoir and facilities management, we have been able make them viable. One of our strengths is to take some of the marginal fields and make them (productive), using a lot of creativity in terms of costs, facilities and very importantly, how we look at the reservoir. We have good people in geosciences, petroleum engineering and so on.
In tight formations, we have to be able to master the art of how to fracture the reservoir to allow for the gas to flow. ""Significantly, the Block 63 concession marks the realization of Petronas' longstanding desire to develop stronger energy links with the Sultanate, says Datuk Abdullah Karim.
""Petronas has for many years been looking to have some ventures in Oman. There has been some cooperation with Petronas in the area of LNG. About 6-7 years ago, Petronas was involved in LNG cargo swaps. There has also been a lot of technical exchange between Petronas and companies (in Oman).
We are also close to PDO, with which we do a lot of exchanges."" Asked about Petronas' plans, if any, to expand its presence in Oman's oil and gas sector in the future, Datuk Abdullah Karim stated: ""We will study other blocks that are available. If the opportunity is right then we will want to venture into those blocks.""
Petronas joins a growing list of high-profile energy majors in exploring hydrocarbons in the Sultanate. The Malaysian government-owned oil and gas company is ranked among Fortune Global 500's largest corporations in the world. Since its establishment in 1974, it has grown into the 95th largest company in the world.
Fortune also ranks Petronas as the eighth most profitable company in the world, with net incomes of a staggering $20 billion in 2008. Petronas's operations now span around 32 countries around the world.
The Group is engaged in a wide spectrum of petroleum activities, including upstream exploration and production of oil and gas to downstream oil refining, marketing and distribution of petroleum products, trading, gas processing and liquefaction, gas transmission pipeline network operations, LNG marketing, petrochemical manufacturing, and shipping.
(Source: Oman Daily Observer)