Occidental to invest $30bn in extended Oman concession

• Block 53 agreement extended
• 800m additional barrels
• Opec+ quota of 775,000 bpd

Oman has extended a concession with a consortium led by Occidental Petroleum to help increase production from its biggest oil field.

The new concession agreement for Block 53 in south-central Oman, which was set to expire in 2035, includes a commitment to invest $30 billion through an extended 15-year period, the Omani Ministry of Energy and Minerals said on social media platform X.

Texas-based Occidental, which says it is the largest independent oil producer in Oman, expects to unlock more than 800 million additional barrels from Block 53’s Mukhaizna field.

“Oman is a country that keeps giving,” Occidental CEO Vicki Hollub said on the first-quarter earnings call on May 8.

The extension of the concession and additional barrels “offer competitive returns”, and enhance the company’s cashflow in 2025, she added.

Occidental’s oil production in Oman fell about 2 percent year on year to 56,000 barrels per day (bpd) in 2024, while gas production rose about 11 percent year on year to 63 million standard cubic feet per day. 

Oman is not part of Opec, but is included in the wider Opec+ group. It has a 775,000 bpd quota starting in June. In January, it pumped about 990,000 bpd of oil and condensate, a light crude, according to official statistics.

Oman is launching oil and gas licensing rounds and is awarding concession agreements in a bid to increase fossil fuel production, although the share of oil in GDP has dropped to about 32 percent in 2024, from 53 percent in 2014, based on official statistics.

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Occidental has reduced drilling cost per foot and rig cost per barrel by half in Block 53 in the last three years, Kenneth Dillon, president of international oil and gas operations said on the earnings call.

Occidental, which produces oil from four other concessions in the sultanate and has exploration activities in three additional blocks, invested $400 million in 2024 in Oman, drilling 95 wells and using enhanced oil recovery (EOR).

In north Oman, Occidental made a “significant” gas and condensate discovery with estimated resources in place of 250 million barrels of oil equivalent that is “advantageously located near existing infrastructure,” Hollub said.

The company’s exploration programme in northern Oman is one of the most successful in its history, the Occidental website indicates.