Swedish oil and gas company Maha Energy has announced plans to sell its 65% working interest in Oman’s Block 70 to Mafraq Energy.
The deal will see Maha Energy exit the oil and gas block onshore Oman and take Mafraq Energy’s stake in it to 100%.
The consideration for the divesture is valued at up to $14m (OR5.3m).
Spanning across 639 km², the block is situated in the middle of central Oman’s oil-producing Ghaba Salt Basin.
In 2020, Maha Energy was awarded Block 70.
The company completed the minimum work obligations of the first phase of the exploration and production sharing agreement between 2022 and 2023.
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In 2023, five of the eight newly drilled production wells delivered oil at an initial average rate of 300 barrels of oil per day.
With an API of 11–13 degrees and a viscosity that was higher than predicted, the produced oil was heavy.
Maha Energy’s exit is subject to a sale and purchase agreement and meeting all necessary closing requirements, such as getting the Oman’s government’s approval.
Maha Energy CEO Kjetil Solbraekke said: “Block 70 has a high viscosity oil. I believe the project has to consider a heat influx strategy to deal with this. It will require new tests, significant investments and a very dedicated operator, which I believe we will have with Mafraq Energy who has worked on this asset since the very beginning.
“We wish Mafraq Energy all the luck with their future work on Block 70. Maha will now be able to focus on developing the business in Latin America, where we are especially enthusiastic about our position in Venezuela.”
Mafraq Energy CEO Talal S. al Subhi said: “Mafraq Energy and Oman value the wealth of experience and work that was injected in Block 70, and we look forward to continuing the project and creation of value for Oman.”
In November 2023, Oman LNG signed a deal to supply one million tonnes per annum of liquid natural gas to UK oil and gas company BP.