MIDDLE EAST Oman's long-delayed Bukha Field onstream, gas projects on horizon

Dev George Managing Editor - International Said bin Ahmed Al-Shanfari, Oman's Minister of Petroleum & Minerals. Oman's Bukha Field lies adjacent to Iran's Henjam Field in the Strait of Hormuz. The Sultanate of Oman officially became an offshore producer a year ago. In April, 1994, the International Petroleum Corporation (IPC) of Vancouver, Canada brought its Bukha Field onstream.


Dev George
Managing Editor - International


Said bin Ahmed Al-Shanfari, Oman's Minister of Petroleum & Minerals.

The Sultanate of Oman officially became an offshore producer a year ago. In April, 1994, the International Petroleum Corporation (IPC) of Vancouver, Canada brought its Bukha Field onstream.

The Bukha Alpha platform was commissioned that month, along with a 35 km, 16-in. pipeline to carry production to the onshore Khor Kwair gas separation and treatment plant in Ras Al Khaimah, UAE. In the year since, the field has produced over 1,928,000 bbl of condensate and 393,000 bbl LPG, averaging 5,197 b/d condensate, 1,142 b/d LPG, and 40 MMcf/d of residual gas.

The Bukha Field is a large multi-leveled structure lying in the Omani sector of the Strait of Hormuz 12 km offshore Oman's Musandam Peninsula enclave and less than 10 km from Iran's even larger Henjam Field just on the opposite side of the aquatorial boundary. It has estimated recoverable reserves of 157 Bcf of liquid-rich gas and is expected to be in production for at least 15 years.

The Bukha concession, with the Bukha Field as its centerpiece, is Oman's only offshore licensing. It is held by operator IPC (30%) and its partners, the UK's Eagle International (10%), Australia's Novus Petroleum (10%), and Dutch oil trader John Deuss's Transworld Exploration - Bermuda (50%).

The long-delayed development of Bukha Field, at a cost of some $60 million, was finally begun in 1993. Discovered in 1986, development of the field was first delayed by the Iran-

Iraq War, then by the Gulf War, and finally by a dispute with Iran over whether the Bukha Field was actually a part of the same formation as its Henjam Field. (Iran has pressed for joint development of such Arab-aquatory fields in Qatar and the UAE, and although it has not publicly called for such an arrangement with Oman for Bukha, the Sultanate was reluctant to begin development for several years because of this political pressure.)

Nevertheless, the field's development was begun two years ago, with Offshore Pipelines (now J. Ray McDermott) completing two of the three wells by installing wellhead jackets and topsides. It was financed by Barclays Energy Finance, the Arab Banking Corp., and the National Bank of Ras al-Khaimah.

About 5,200 b/d of condensate is exported by ship from the Ras al-Khaimah Khor Kwair processing plant, while the 1,150 b/d LPG is trucked from the plant to Dubai, UAE, where it is purchased by a local gas company for local consumption. The 40 million cf/d of residual gas is delivered without charge to the Emirate of Ras al-Khaimah in exchange for use of its Khor Kwair facility. In addition, IPC is currently exploring the possibility of selling additional quantities of gas to local consumers, which would significantly enhance condensate and LPG production. (A floating methanol plant was originally proposed to take a considerable quantity of Bukha's production, but the British-led consortium that was to undertake the project withdrew for lack of funding and it was shelved.

LNG & Indian pipeline

Oman's ruler, Sultan Qaboos bin Said al Said has an ambitious program not only to increase his country's level of gas reserves, but to boost their production and expand their delivery to far-flung markets. The Sultanate's Minister of Petroleum and Mineral Resources, Said bin Ahmad al-Shanfari, estimates that there are some 10 tcf of gas both onshore and offshore - probably less than a trillion offshore - and is emphasizing the country's need to create a gas infrastructure by the turn of this century. At its center are two major projects to drive the industry during the first 50 years of the 21st century: an LNG facility and the Oman-India gasline.

Petroleum Development Oman (PDO), the majority state-owned company (60%) - operated by Shell, with 34%, and held also by Total (4%) and Partex (2%) - is overseeing the entire upstream transformation, including the $2 billion program to appraise gas and condensate reserves and optimize development of fields for the production, gathering, processing, and transportation through a 42-in., 400 km pipeline of approximately 10 billion cm/year of gas production to feed a liquification plant at Bimah, 200 km south of Muscat on the Arabian Sea. (The construction of the LNG plant and a marine export terminal, and the purchase of seven LNG carriers are estimated at an additional $7 billion expenditure.) The project is to be completed by 1999.

The Oman-to-India pipeline, at an estimated cost of $5 billion, is to be completed even before the LNG facility, in 1997. The project calls for construction of a 1,500 km, 42-in. deepsea gas pipeline that will carry 50 MMcm/d of natural gas to the west coast of India for 40 years. A feasibility study by Bechtel, SANP, and Saipem found the pipeline a technically viable project. It is to be laid at a sea depth of 10,000 ft across international waters.

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