CHEVRON PUTS OMANI INTERESTS ON THE BLOCK

Chevron Corp. has put its Omani exploration and production assets on the auction block. Chevron said the move represents the first time producing properties have been offered for sale in Oman. It offers a "unique entry opportunity for a company looking for a stable source of Middle East crude," Chevron said. The offering is part of Chevron's restructuring. It also is seeking bids on its U.K. North Sea and Spanish upstream interests, efforts previously announced. Chevron will begin taking

Nov. 5, 1990

2 min read

Chevron Corp. has put its Omani exploration and production assets on the auction block.

Chevron said the move represents the first time producing properties have been offered for sale in Oman. It offers a "unique entry opportunity for a company looking for a stable source of Middle East crude," Chevron said.

The offering is part of Chevron's restructuring.

It also is seeking bids on its U.K. North Sea and Spanish upstream interests, efforts previously announced.

WHAT'S INVOLVED

Chevron will begin taking bids for its Suneinah concession in Northwest Oman about 300 miles west of Muscat.

Less than 1% of the 2,856,000 gross acre concession has been developed.

The concession contains Chevron's key asset in Oman, Safah oil field, which accounts for all production in the concession.

Discovered in 1983, Safah initially produced at a rate of 3,000 b/d.

During the past 3 years, an extensive development and infill drilling program has boosted production in Safah field to about 25,000 b/d.

Chevron expects Safah flow to climb to 28,400 b/d in 1992 when the infill program is complete and results of gas injection are realized.

Under a profit sharing deal with Oman, Chevron receives 18.2% of Safah production, sold as 34 Omani blend.

Degolyer & MacNaughton estimates gross proved reserves in Safah at 90 million bbl as of midyear 1990.

GAS/CONDENSATE STRIKES

Chevron also made two gas/condensate discoveries in the concession.

Wadi Rafash, about 50 miles southeast of Safah, has gross potential reserves of about 188 bcf of gas and 11 million bbl of condensate.

Shams, 22 miles northeast of Safah, has gross potential reserves of about 134 bcf of gas and 5 million bbl of condensate.

Development of the two gas/condensate strikes has been deferred pending discovery of additional reserves needed to justify new transportation and marketing infrastructure, Chevron said.

Chevron's 35% interest in the concession is held by its Gulf Oman Petroleum Ltd. unit. Concession operator Occidental of Oman Inc. holds the remaining 65%.

"Oman has been an excellent place to do business, as evidenced by the government's willingness to modify concessionary terms to allow development of Safah during a time of low energy prices," Chevron Overseas Petroleum Inc. Pres. Richard Matzke said. Goldman, Sachs & Co. and Burns Fry Ltd. are jointly representing Chevron in the sale.