Meethaq, the pioneer of Islamic banking in Oman from Bank Muscat, and Hydrocarbon Finder E&P LLC (HCF) signed an Islamic project financing facility for the development of oil and gas fields in Block 7 of Oman operated by HCF.
The facilities agreement was signed by Sulaiman Al Harthy, Deputy Chief Executive Officer - Meethaq Islamic Banking, and Brig. Gen. (Retd.) Sulaiman Al Adawi, Chairman of the S&T Group on behalf of Hydrocarbon Finder.
The signing ceremony was attended by Mohammed Al Jahwari, CEO and co-promoter of HCF; Ali Al Batrani, External Affairs Director and co-promoter of HCF, Wadhah Al Adawi, Vice Chairman of HCF, along with senior officials of Meethaq and HCF.
“Meethaq is proud to be associated with Hydrocarbon Finder and congratulate the promoters for initiating this project. Meethaq’s association with the project comes as part of its commitment to spotlight investment opportunities in core development sectors across the Sultanate. As the pioneer of Islamic banking in Oman, Meethaq recognises the immense investment prospects and potential that Oman offers and is committed to supporting strategic national development initiatives in line with Oman's Vision 2040 economic blueprint. Within four years of operations, Meethaq has crossed a milestone of over OMR 1 billion in assets and consolidated its leadership position, recording many achievements contributing to the growth and development of the Sultanate’s economy,” said Al Harthy.
HCF took over the operatorship of Block 7 in April 2016 under an Exploration and Production Sharing Agreement signed with the Government of Sultanate of Oman. Since then, HCF undertook a low cost, high yield development programme to revive production from the discovered fields in the Block and more than doubled the production within a span of 18 months. Block 7 is located on the south Rub Al Khali (Empty Quarter) basin and has been producing hydrocarbons for the last three decades.
“S&T has always believed in diversification through multiple business verticals in multiple geographies to mitigate the risks of concentration. As a part of this diversification strategy, the Group ventured into the upstream oil and gas sector through Hydrocarbon Finder in 2015. The timing of entering into the sector in a low price environment meant that HCF is able to execute its development activities in a cost efficient manner. We are extremely happy with the support and commitment shown by Meethaq Islamic Banking to HCF’s project and look forward to a long and mutually beneficial relationship with the bank,” said Al Adawi.
HCF expects to add reasonable volumes of incremental oil and gas reserves in due course. There are immense development opportunities in Block 7 and HCF is well positioned to maximise the production of hydrocarbons from this block. HCF plans to triple the production from Block 7 in the short-term. HCF intends to invest up to $160 million towards development activities in a phased manner. In addition to employment and business opportunities for a number of citizens and SMEs in Oman, HCF’s project will also contribute positively to government revenues from incremental oil production.
“With the low oil price environment there is a renewed interest to develop matured fields using the latest available technology to minimise risks and maximise returns. HCF undertook this low cost development model by investigating and reinstating the integrity of existing wells followed by side-tracking of existing wells over the last 12 months. This has led to production contribution from previously unproduced reservoirs within existing fields of Block 7. This is to be followed by an exploration campaign targeting deeper horizons that have been producing in other parts of Oman,” said Al Jahwari.