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OMV begins first oil deliveries from Yemen

Uchenna Izundu
International Editor

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.

Contact Uchenna Izundu at uchennai@pennwell.com.


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