LONDON, Dec. 29 -- OMV AG has begun production of 1,000 b/d of oil from its Kharwah-1 well on Block S2 (Al Uqlah) in central Yemen, and it plans to deliver 11,000 b/d of oil by 2008.
OMV wants to expand oil production to 32,000 b/d by 2009-10 under the second phase of its development plan. The field, which has 50 million bbl of proved oil, "is expected to have a lifetime of at least 20 years," OMV added.
Block S2, which spans 1,000 sq km, will initially cost OMV $85 million to develop, but costs are expected to rise to $250-350 million for phases 1 and 2.
OMV has also won operatorship of Block 29 in the Jeza-Qamar basin under Yemen's third licensing round. It will work with Pakistan Petroleum Ltd. on a joint venture partner basis, each taking a 50% share in this project. Block 29, in eastern Yemen, covers an area of 9,237 sq km. Exclusive negotiations for a production-sharing agreement will commence shortly, OMV said.
OMV is the operator of Block S2 with a 44.0% stake. Its partners are Sinopec International Petroleum Exploration & Production Corp. 37.5%, Yemen General Corp. for Oil & Gas 12.5%, and Yemen Resources Ltd. 6%.
Block S2 is situated close to Block 2 (Al Mabar), for which OMV signed a production- sharing agreement (PSA) on July 13, 2005. The Yemeni Parliament ratified the PSA for Block S2 on May 15, 2006, and President Ali Abdulla Saleh signed it on June 7.
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