Oman awards contract to Indonesian bidder
Posted: 30 January 2006
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Petroleum Development Oman (PDO) has awarded a contract to MedcoEnergi, Indonesia's largest publicly quoted oil and gas company, to develop a cluster of 18 small fields in the Nimr-Karim area of south Oman that currently produce 18,000 barrels of oil per day.
The contract was awarded on the basis of a highly competitive tender in which suitable companies from Oman and across the globe participated.
The service contract is aimed at raising the production levels of the small fields in a cost-effective way by providing the service provider a high degree of freedom in its operations. The contract will thus allow PDO to dedicate its resources to the development of its larger fields, which currently account for 95 per cent of its oil production.
As part of the Karim Small-Fields Service Contract, MedcoEnergi will submit a work programme for the field cluster covering all aspects of the clusters development from exploratory appraisal and sub-surface studies to well engineering and facilities construction through to operations and maintenance.
MedcoEnergi will also submit an annual budget for the financing of that programme. PDO, which retains full accountability for what happens in its concession area, will review and approve the work programme and budget. No sharing of the equity in the field is involved in the agreement.
This means that MedcoEnergi will receive only financial rewards based on the production levels obtained from the fields covered by the service agreement and on the costs involved in achieving those production levels. Oman Oil Company will also participate in the service contract as a partner with MedcoEnergi.
Petroleum Development Oman (PDO) is the major exploration and production company in the Sultanate. It accounts for about 90% of the country's crude-oil production and nearly all of its natural-gas supply. The Company is owned by the Government of Oman (which has a 60% interest), the Shell Group (which has a 34% interest), Total (which has a 4% interest) and Partex (which has a 2% interest). Gas and condensates are operated by PDO on behalf of the government.
Posted by Editor Pipeline Magazine
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