IOC Acquires 17% Participating Interest in Oman Oil Field from Shell

Indian Oil Corporation (IOC) has acquired 17% participating interest in the Mukhaizna Oil Field (including the marketing rights for entitlement oil) by acquiring 100% equity stake in Shell Exploration & Production Oman Ltd. (SEPOL) from Shell Overseas Holdings Ltd., for a transaction value of $329-mn.

IOC has made this acquisition through its wholly-owned subsidiary, IOCL Singapore Pte. Ltd. and the effective date of the transaction is January 1, 2017.

The move is expected to give a major fillip to IOC’s exploration and production (E&P) business and presence in the upstream sector in the Middle East.

The Mukhaizna Oil Field is the single largest producing individual oil field in Oman, contributing ~13% of total Omani crude production with current production of 1,20,000-bpd (barrels per day). It is also, the largest steam flood project in the Middle East. The field is operated by Occidental Mukhaizna LLC (45%). The other partners are Oman Oil Company SAOC (20%), Liwa Energy Ltd. (15%), Total E & P Oman (2%) and Partex (Oman) Corporation (1%).

This is IOC’s first producing upstream acquisition in Oman, and has a significant strategic importance to India, both in terms of augmenting India’s energy security as well as enhancing India’s stature in the global political and economic arenas.