Offshore 2D seismic data acquiredAround 2,000 square kilometres
Drilling capability of extended reach well10 kilometres
Offshore expertise in OmanJuly 3, 2015
PetroTel, the Texas-headquartered exploration and production group, has interests in blocks 17, 40, 39 and 67 in Oman. Chairman and CEO Anil Chopra highlights the opportunities and challenges of oil and gas exploration and production.
How difficult is it to gather seismic data offshore?
The majority of block 40 and parts of block 17 are located offshore in the Musandam Governorate, at the northern tip of Oman. We conducted an offshore 2D seismic survey last year of around 2,000 square kilometres, which covered the busiest shipping lanes in the world – the Strait of Hormuz, the Gulf of Oman and the Arabian Gulf.
This was a challenging task due to the traffic of nearby vessels. The seismic data vessel travels at around 3 to 4 knots, while the cargo tankers and vessels using the shipping lanes are travelling as high as 25 knots. Monitoring traffic while mapping the survey was key to gathering this important offshore seismic data.
This was one of the largest offshore surveys done in the shallow waters of the area. This data has given us very important insights, and we will be drilling key prospects in the coming years based on processing and interpretation of this data.
How expensive is drilling offshore in comparison to onshore in Oman?
Offshore drilling is three to 20 times more expensive than onshore drilling, depending on the water depth. Our offshore drilling activities will be in shallow waters, reaching a maximum water depth of 100 metres. Even though drilling offshore is not as expensive as it used to be prior to the drop in crude oil prices, it is still significantly higher than onshore drilling.
Seismic expressions of our data in blocks 17 and 40 are showing large prospects with very high chance factors. It is difficult to state the exact number of barrels we will be producing, but the prospectivity of our offshore blocks is high and we remain hopeful. The construction of the Musandam Gas Plant by Oman Oil Company Exploration and Production has added great value to regional infrastructure.
We hope we will be able to commercialise our discoveries quickly through the utilisation of this gas plant. We are thankful to the Ministry of Oil and Gas for having the keen foresight to construct the gas plant in Musandam and Oman Oil for their execution of a very challenging project.
Is it difficult to find the right talent for offshore operations in Oman?
It is challenging to hire the right talent for offshore and onshore exploration operations. We have two very significant onshore blocks in Dhofar and are planning to drill in the near future. Exploration is a high-risk endeavour and there are no guarantees of continuous employment. However, our workforce will need to expand dramatically once we commence commercial hydrocarbons production.
PetroTel is aware of the challenges. The population of Musandam is only about 30,000, and unlike Muscat, the local capital Khasab is not a financial centre. In general, talent in Oman is attracted to Muscat. Hiring and training the best available local talent will be the key to our in-country value strategy. We will also need to build schools, hospitals and other infrastructure to support a large production base and a competitive workforce. All the operators in the Sultanate are searching for the same talent. The workforce in Oman is very professional with a mixture of skilled Omani and international expertise.
Are offshore operations in Oman an environmental risk?
There are offshore rigs operating around the world and upstream companies should take the necessary precautions to prevent oil spills and other hydrocarbons-related sea pollution. We have one key advantage in that PetroTel’s offshore blocks are not in deepwater, minimising the environmental risk factors. To further minimise offshore risks, we have plans to reach hydrocarbons by drilling extended-reach wells from onshore. We have the technology today to drill extended-reach wells up to 10 kilometres and thus eliminate the need to drill offshore. We are proud to have one of the most powerful rigs in Oman, which will enable us to drill long-reach wells from onshore.
Do you expect oil prices to increase?
Oil prices have begun to stabilise from the recent decline as rig utilisation drops and higher-cost production is curtailed. Global energy demand is projected to continue to increase over time and oil is a finite resource. It is only a matter of time until oil prices begin to rise once again. The current low oil prices should not discourage operators who have a long-term strategy in Oman.
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