Muscat: Meethaq, the pioneer of Islamic banking in Oman, and Hydrocarbon Finder E&P (HCF), have signed an Islamic project financing facility for the development of HCF-operated oil and gas fields in Block 7 of Oman.
HCF took over the operatorship of Block 7 in April 2016, under an Exploration and Production Sharing Agreement signed with the Oman government. Since then, HCF has undertaken a low-cost, high-yield development programme to revive production at discovered fields in the block and more than double the production within a span of 18 months.
Block 7 is located on the south Rub Al Khali (Empty Quarter) basin and has been producing hydrocarbons for the last three decades. HCF expects to add reasonable volumes of incremental oil and gas reserves in due course. There are immense development opportunities in Block 7, and HCF is well-positioned to maximise the production of hydrocarbons in this block. In fact, it plans to triple the production from Block 7 in the short term.
Further, HCF intends to invest up to $160 million towards development activities in a phased manner. In addition to employment and business opportunities for a number of citizens and SMEs in Oman, HCF’s project will also contribute positively to government revenue through incremental oil production.
“With the low oil price environment, there is a renewed interest to develop matured fields using the latest available technology to minimise risks and maximise returns. HCF undertook this low-cost development model by investigating and reinstating the integrity of existing wells, followed by side-tracking of existing wells over the last 12 months. This has led to production from previously non-producing reservoirs within the existing fields of Block 7,” said Mohammed Al Jahwari, CEO of HCF.
“This is to be followed by an exploration campaign, targeting deeper horizons that have been producing in other parts of Oman,” Al Jahwari added.
“Meethaq is proud to be associated with Hydrocarbon Finder and congratulates the promoters for initiating this project. Meethaq’s association with the project comes as part of its commitment to spotlight investment opportunities in core development sectors across the Sultanate,” Sulaiman Al Harthy, Deputy Chief Executive Officer of Meethaq Islamic Banking, said.
“As a pioneer of Islamic banking in Oman, Meethaq recognises the immense investment prospects and potential the country offers and is committed to support strategic national development initiatives, in line with Oman’s Vision 2040 economic blueprint. In four years of operations, Meethaq has crossed a milestone of over OMR1 billion in assets and consolidated its leadership position, recording many achievements and contributing to the growth and development of the Sultanate’s economy,” Al Harthy added.
“S&T has always believed in diversification through multiple business verticals in multiple geographies to mitigate the risks of concentration. As a part of this diversification strategy, the group ventured into the upstream oil and gas sector through Hydrocarbon Finder in 2015. The entry into the sector during a low-price environment means that HCF is able to execute its development activities in a cost-efficient manner. We are extremely happy with the support and commitment shown by Meethaq Islamic Banking to HCF’s project and look forward to a long and mutually beneficial relationship with the bank,” Brig. Gen. (Retd) Sulaiman Mohammed Al Adawi, Chairman of S&T, said.
The facilities agreement was signed by Al Harthy and Brig. Gen. (Retd.) Al Adawi.
The signing ceremony was attended by Al Jahwari; Ali Al Batrani, External Affairs Director and co-promoter of HCF; and Wadhah Al Adawi, Vice-Chairman of HCF, along with senior officials from Meethaq and HCF.