Eni misses in first Oman deepwater well, eyes second target

Italian oil major Eni has found nothing in its first deepwater exploration well in a block offshore Oman but is preparing to drill a second well on a new target.

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 per cent stake and operatorship while Qatar Petroleum and Oman’s state-owned OQ own 30 and 15 per cent, respectively.

The block is in an under-explored area, spanning 90,000 square kilometres with water depths ranging up to 3,000 metres. In 2019 Eni expanded its presence in Oman with working interests in onshore Block 47 and also Block 77 in a 50-50 partnership with BP.

Regarding Eni’s latest drilling failure, Mohammed Al-Rumhy, Oman’s minister for oil, told S&P Global Platts: “[As for 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. But Eni also has an onshore block, we are looking at drilling exploration wells onshore as well”.

Offshore Energy did report that the Italian company started its drilling operations in Oman back in February 2020. However, no further announcements were made.

The things we know are that Eni hired the Pacific Bora drillship for one firm well in Oman for an estimated 30 days. Currently, the drillship is owned by Noble Corp. following the acquisition of the previous owner Pacific Drilling. It is also one of the two rigs up for sale by the company. According to AIS data, it is moored in the Duqm port.

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

“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“, Rumhy added. “If the quantity is large, we may have to expand“. According to the oil minister, this could mean building additional Oman LNG export facilities.

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. Data from Platts Analytics shows that Omani LNG exports could reach around 14 Bcm/year over the coming five years.

It is worth reminding that, although many oil majors are taking an ever-increasing interest in Oman, BP recently sold a 20 per cent stake in Oman Block 61 to PTTEP and, in turn, reduced its operated interest to 40 per cent for a price tag of $2.4 billion. The block hosts the Khazzan and Ghazeer giant gas fields.

Offshore Energy has contacted Eni for confirmation and additional details regarding the Block 52 well. We will update the article if and when we receive a response.