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Oxy will serve as operator under the EPSA and hold a 48% interest, with Mubadala holding a 32% interest and the Oman Oil Company holding the remaining 20%.
"We are pleased to expand upon our existing relationship with Oman and look forward to working with our partners to help ensure that future supplies of natural gas will be available to fuel Oman's economic growth. Signing this EPSA is another important step in the implementation of our growth strategy within the region. The development of the substantial natural gas resources contained within the contract area will create significant value for the people of Oman and for our shareholders,"said Dr. Ray R. Irani, Chairman and Chief Executive Officer of Occidental.
"This EPSA is a logical expansion of our energy portfolio in Oman and we are pleased to build upon our long-standing partnership with Oxy in this new venture. The project is another example of Mubadala's strategy of leveraging Abu Dhabi's history and experience as a trusted energy supplier to build a diverse range of energy related businesses in the UAE and internationally,"said Khaldoon Khalifa Al Mubarak, CEO and Managing Director of Mubadala.
Exploration, appraisal and development activities will commence immediately. Production from the area is expected to begin in 2010 and reach a plateau of approximately 165 MMscfd (27,500 boepd) by year end 2011. Oxy's net share of production at plateau is expected to be approximately 10,000 boepd; with Mubadala's net share around 6,000 boepd.
Total capital investment in the contract area is expected to be approximately $500m over the next four years. In addition to the field developments, this investment will include up to nine exploration wells over a six year exploration period to test the upside potential of the shallow and deep gas plays found in the region.
Posted by Rana Mesbah
