RAK Petroleum has bought the Omani assets of Canada's Heritage Oil for US$28 million (Dh102.8m), boosting its stake in an offshore field that supplies gas to Ras al Khaimah. The transaction adds a 10 per cent interest in the Omani side of the West Bukha offshore oil and gasfield to RAK Petroleum's existing holding, raising it to 50 per cent. The field is located in the Strait of Hormuz, straddling the maritime border between Iran and Oman's Musandam territory.
"This acquisition increases our exposure to West Bukha's upside potential and also underscores our commitment to investing in the upstream sector in the Sultanate of Oman," said Abdulaziz al Ghurair, the chairman of RAK Petroleum. In February, the company and its partners, Heritage and South Korea's LG International, started pumping 10,000 barrels per day of oil and 30 million cubic feet per day of gas from the field, using two wells on an unmanned platform about 25km off the Musandam peninsula's coast.
The combined gas output from West Bukha and the nearby Bukha field are sent by an undersea pipeline to a processing plant in Ras al Khaimah that supplies gas to industrial and commercial users in the emirate. All oil produced is for export. RAK Petroleum, whose shareholders include the Ras al Khaimah Government, was looking for further acquisitions to expand its portfolio in the Middle East and North Africa, said Bijan Mossavar-Rahmani, the managing director of the company.
The purchase from Heritage in the Omani offshore block that includes both Bukha and West Bukha has consolidated RAK Petroleum's position in an area well known to the company, he added. The start of gas production from West Bukha earlier this year was a welcome development for Ras al Khaimah, which badly needs more gas to fuel power and cement plants. Production from the mature Bukha field has declined in recent years and is currently less than 15 million cu ft per day.
The Ras al Khaimah Gas Commission, the emirate's government-owned gas company, is seeking further agreements related to field developments in and around its territorial waters. Last month, the government-owned Ras al Khaimah Investment Authority took a stake in an Indonesian coal mine to support a plan to build a coal-fired power plant to meet the emirate's electricity needs. The chief executive of Heritage, Tony Buckingham, said the company would invest cash from the sale of the Omani assets in Uganda and the Kurdistan region of Iraq, where it is engaged in oil and gas exploration and development.
Heritage's shares closed today on the London Stock Exchange at 340.25 pence, down three pence on the day. @Email:tcarlisle@thenational.ae
