Oman Signs Block 18 Concession Pact with Petronas-OQEP JV: Key Implications for Investors and Energy Sector Growth
MUSCAT: The Ministry of Energy and Minerals, representing the Government of the Sultanate of Oman, has signed a concession agreement for offshore Block 18. This initiative is part of ongoing efforts to enhance exploration, production activities, and expand the hydrocarbon resource base within the country.
The agreement was signed by Eng. Salim Nasser Al Aufi, Minister of Energy and Minerals; Mahmoud bin Abdullah Al Hashmi, Acting CEO of OQ Exploration and Production (OQEP); and Muhammad Redhani Abdul Rahman, Vice President of International Assets at Petronas, on behalf of its subsidiary, PC Oman Ventures Limited.
As per the terms of the agreement, Petronas will take on the role of operator with a 70% participating interest, while OQ Exploration and Production will retain a 30% stake in the concession rights. The agreement outlines an initial exploration period of four years, which may be extended. It also includes provisions to declare commerciality and grant a production concession for up to 30 years.
Offshore Block 18 is situated in the Sea of Oman, covering an area of over 21,000 square kilometers. It is regarded as having diverse geological potential, despite the technical challenges associated with deep-water exploration, as no confirmed discoveries have been made in the block to date.
Eng. Salim Nasser Al Aufi emphasized that exploration activities are crucial for the sustainable utilization of Oman’s natural resources. He highlighted that the expansion of exploration programs aims to increase reserves and enhance production levels, thereby contributing to sustainable economic and social development and bolstering the oil and gas sector’s role in the national economy.
The Minister also noted that the agreement underscores the attractiveness of Oman’s new investment incentive framework and its capability to attract leading international companies like Petronas for investments in offshore areas. He reiterated that strategic partnerships between national companies and international expertise are vital for transferring advanced technologies and developing Omani talent within this key sector. The agreement is also expected to initiate a broader partnership with Petronas in Oman.
He mentioned that the investing companies will implement a comprehensive work program, which includes conducting technical studies, potentially adding geophysical surveys in deepwater areas, and drilling exploratory wells to fully assess the block’s potential.
Dr. Anwar Sulaiman Al Kharousi, Chief Commercial Officer of OQ Exploration and Production, stated that signing the concession agreement for Block 18 significantly enhances the company’s offshore portfolio and strengthens its exploration and production activities. OQ Exploration and Production is the largest specialized exploration and production company in the Sultanate, averaging approximately 224,000 barrels of oil equivalent in daily production.
Muhammad Redhani Abdul Rahman from Petronas remarked that the agreement builds on the Memorandum of Understanding signed with OQ Exploration and Production in the third quarter of 2025. He added that Petronas will leverage its advanced offshore exploration expertise and modern deepwater technologies in collaboration with its partners to assess the hydrocarbon potential of the block, supporting long-term energy security and reinforcing its investment presence in Oman.
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The recent concession agreement for Offshore Block 18 underscores Oman’s commitment to boosting its hydrocarbon exploration and production capabilities, presenting a critical opportunity for businesses in the energy sector to engage in strategic partnerships. This initiative also highlights Oman’s attractive investment climate, which could attract further foreign investment and innovation in advanced technologies. Smart investors should closely monitor the progress of this exploration, as it may open avenues for future collaborations and ventures within Oman’s evolving market landscape.
