EOG plans exploration drilling in Oman this year: company chairman

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Strong points

Onshore project targets unconventional oil

Construction marks first foray into the Middle East

99% of EOG’s production in the first quarter of 2021 came from the United States

EOG Resources, a large upstream American independent, is gearing up for unusual exploration drilling in Oman, the company’s president and next CEO said on June 22, after making its first entry into the Middle East in late 2020.

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Houston-based EOG plans to drill an unconventional onshore prospect later this year in the Rub Al-Khali Basin located in the southwestern region of Oman.

The project came about as EOG, a major US shale player which, in the first quarter of 2021, obtained more than 99% of its oil production of around 431,000 bpd from domestic fields, examined unconventional drilling and exploration opportunities in a number of foreign arenas, Ezra Yacob told the JP Morgan 2021 Energy, Power and Renewables virtual conference.

“It’s an oil prospect,” Yacob said of the planned Oman well. “In Oman, we found a good partner with a country that has established oil services [network]. They understood that the contractual conditions needed to stimulate unconventional development are slightly different from conventional ones. “

Yacob was appointed earlier this month to succeed current CEO Bill Thomas in October 2021.

At an analyst conference in November 2020, EOG COO Billy Helms said the company believes that access to oil services and equipment in Oman is “competitively priced.” will be necessary to ensure the success of tight tank oil “in the country.

As part of the deal with Tethys Oil for the Oman project, EOG will drill two test wells within two years to assess the acreage potential, Yacob said. He added that the country has a low entry cost and “significant” upside potential.

Known hydrocarbon basin

Yacob said the Rub Al-Khali Basin is a known basin containing hydrocarbons across the Arab Shield. He also noted that Oman has a history and stable oil and gas operations, with a number of conventional vertical and unconventional horizontal wells in the country.

EOG officials said they believe the project could compete with others in the company’s diverse portfolio which primarily contains US shale deposits.

During a call for results in May, Tethys officials called the Rub Al-Khali basin “quite prolific” in both Saudi Arabia and Abu Dhabi, adding that its own bloc had been upgraded to its potential in hydrocarbons.

“[It] has turned out to be very interesting, both geologically and operationally, and we’re going to put a lot of time and effort into trying to unlock the hydrocarbon potential that we definitely think is there, ”said Tethys CEO , Magnus Nordin, during the call.

Oman’s production in recent years has been fairly stable, averaging around 1 million barrels per day. But S&P Global Platts Analytics predicts it will drop below 950,000 bpd by the mid-2020s

“Our forecast assumes few new projects and a gradual decline in existing production,” said Rene Santos, North American sourcing director for Platts Analytics.

The number of Oman’s land platforms had remained stable before the pandemic between the low to mid-1950s, but reached a low of 36 in November 2020, before rebounding to the low 40s.

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