Oman in oilfield deal with US and UAE companies

Oman has signed a new production sharing deal with US and Abu Dhabi-based companies.

The deal was signed by the Oil and Gas Ministry with the US-based Occidental Petroleum Corporation and Abu Dhabi-based Mubadala Development Company for governing the development of the Mukhaizna heavy oil field.

The current production of the field is approximately 10,000 barrels per day but Occidental, its partners and the Government of Oman are expected to invest over $2 billion to implement a large-scale team flood and increase production from the field to 150,000 barrels per day within the next few years.

Occidental Petroleum Corporation is a US oil and gas company based in Los Angeles. Mubadala Development Company, a wholly owned company of Abu Dhabi, will invest in the project through its wholly owned subsidiary Liwa Energy Limited.

Dr. Mohammad bin Hamad Al Rumhi, Minister of Oil and Gas, signed on behalf of the Sultanate's government, Casey Olson, Executive Vice President, signed on behalf of Occidental Petroleum Corporation and Ahmad Ali Al Sayegh, Director and Board Member, signed on behalf of Liwa Energy Limited.

Reuters adds: Analysts said the news of the deal may come as a setback for Royal Dutch/Shell, which is seeking to boost reserves that took a hit last year after it overbooked on several large projects.