Masirah Oil swaps tankers in Oman, seeks rig contractor for new drilling campaign

Singapore’s Rex International has revealed that its subsidiary, Masirah Oil, has completed a floating storage tanker change in the Block 50 concession, located offshore Oman, and plans to carry out a drilling campaign in the third quarter of 2022 to bolster hydrocarbon production and reserves.

Masirah Oil holds a 100 per cent interest in the Block 50 concession, while Rex International holds an effective interest of 91.81 per cent in Masirah Oil. Rex International informed on Wednesday that the previous floating storage tanker in the Block 50 concession in Oman had been replaced by a new floating storage tanker, explaining that the replacement would allow for the tanker to be in the field for several years without the need for dry-docking.

During the change-out in February and March 2022, the production from the field was shut-in for 24 days. The production has since resumed. In addition, a change-out of the mobile offshore production unit (MOPU) is also underway with upgraded facilities on-board, which will allow for greater liquid handling capacity and longer time in the field.

It is worth reminding that, back in November 2019, Masirah awarded a contract to Wings Offshore for the floating storage and offloading (FSO) vessel, Mt Bull Papua, to be used on the Yumna field in Block 50. The Mt Bull Papua is an Aframax tanker with a storage capacity of 750,000 barrels.

In early May 2020, production was resumed from a mobile offshore production unit, which was installed in the Yumna field during a planned three-week shutdown. The MOPU, together with the Aframax storage tanker, constituted permanent offshore production facilities.

Moreover, Masirah Oil’s field development plan (FDP) for the Yumna field was approved by Oman’s Ministry of Oil and Gas in July 2020. The Ministry also awarded the Declaration of Commerciality (DOC), enabling Masirah Oil to fully develop the Yumna field while continuing to explore the rest of Block 50 offshore east Oman.

In line with this, the company completed the drilling of three exploration prospects that were located near the Yumna field, in the Arabian Sea offshore Oman, back in April 2021.

Rex further explained that preparations for a targeted drilling campaign and the selection of a drilling rig contractor to drill one firm well and one optional well was ongoing. The company elaborated that the first well would establish the eastern extent of the Yumna field.

Afterwards, the well will be potentially deepened to test a major prospect within the Khufai carbonate – a proven producer from other concessions onshore Oman –  and if it proves to be commercial, it can be produced at a very low cost from the existing Yumna field facilities.

Rex also added that the second well, an optional exploration well, was under review as recent geological interpretation had identified several significant prospects – Yumna analogues and additional Khufai carbonate opportunities.

Additionally, Rex stated that a reinterpretation of gravity and magnetics studies had resulted in potential areas of interest covering the sub-Melange prospects with new encouraging findings indicating the covering rock to be less onerous for drilling.

Therefore, the firm added that a 3D seismic survey covering 15 sq km using ocean-bottom nodes was being planned to further exploit these opportunities. Rex anticipates that seismic acquisition will start in late March 2022.

Dan Broström, Executive Chairman of Rex, remarked: “Our key focus is to increase production and reserves. With Brent oil price presently above $120 per barrel and increased market demand for oil under current economic and geopolitical circumstances, it makes more sense to invest in our existing assets for higher realisation of cash flow in the near term than to procure new assets at high valuation.”

To remind, Rex in January 2022 described the previous year in its round-up as transformational, revealing that its primary goal for the future would be to increase production and reserves in Oman, Norway and Malaysia in a bid to pursue further growth opportunities.

The company also confirmed that production in 2021 had increased with the addition of two production wells to the existing Yumna 1. The Yumna 2 well started production on 23 January 2021, while the Yumna 3 well started production on 18 February 2021.