Muscat: Petroleum Development Oman (PDO) and Indonesia-based MedcoEnergi International have formally signed a first-of-its-kind service contract to develop a cluster of 18 small fields in the Nimr-Karim area of south Oman, according to a press release from PDO on Monday.

The Karim small fields service contract will give Indonesian company MedcoEnergia 10-year mandate to accelerate the development of a group of PDO's small fields so that the national oil firm can devote more attention to its portfolio of large fields, which account for more than 80 per cent of Oman's total oil production.

Under the terms of the pact, MedcoEnergi and its partners will develop a work programme and arrange for its budgeting and financing.

The small fields in Nimr-Karim area currently produce 18,000 barrels of oil per day. A new company has been floated by MedcoEnergi and Oman Oil Company for carrying out the service contract in the Sultanate. Oman Oil Company, the investment arm of the government, has 25 per cent stake in the new firm.

The ceremony was held at the Oil and Gas Exhibition centre. It was attended by Dr Alawi Mohammad Shihab, Indonesian Presidential envoy to the Middle East, Nasser Bin Khamis Al Jashmi, Under-Secretary of the Ministry of Oil and Gas and other representatives from both companies.