DNO International Signs Saleh Field Agreement
by DNO International
Friday, April 20, 2012
Norwegian oil and gas firm DNO International announced Friday that it has signed an amended concession agreement with the Government of the Emirate of Ras Al Khaimah, RAK Gas and Dahan Petroleum granting Dahan exploration rights to certain outlying areas of the offshore Saleh concession in exchange for Dahan covering the cost of DNO International's and RAK Gas' participation in any exploration program.
Dahan has 12 months to conduct a technical review of existing data and to acquire 3D seismic data, following which it can elect to drill, at its sole risk and expense, an exploratory well in the acreage surrounding, but not including, the Saleh field.
The amended concession agreement provides that DNO International would have a 16 percent carried interest in an exploratory well. Dahan has the option to drill additional exploratory wells in the designated areas with DNO International retaining the option to continue its 16 percent carried interest on each such well or to participate instead at 40 percent on a paying basis.
The ownership of participating interests and other fiscal and operating terms of the concession area containing the Saleh field remain unchanged, with DNO International holding 70 percent and RAK Gas the remaining 30 percent.
"We are pleased that Dahan is enthusiastic about the offshore potential of the Emirate of Ras Al Khaimah and will conduct an exploration program designed to give us a fresh look at the area surrounding the Saleh field," said David Thorpe, General Manager of DNO Ras Al Khaimah.
"If a discovery is made, we intend for it to be tied back to our existing platform and pipeline facilities, enhancing the commerciality of the planned Saleh redevelopment project," he added.
The Saleh field was first brought on stream in 1984, but following water encroachment and pressure decline in the Mishrif-Mauddud reservoir the field has been producing intermittently since 1996. The deeper Thamama reservoir, from which DNO International produces oil and gas in the nearby West Bukha field
, remains largely untapped at Saleh. DNO International is completing technical studies and finalizing plans to drill into the Saleh Thamama reservoir once a rig becomes available.