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RAK Petroleum Bolsters Stake in RAK Saleh Field, Initiates Redevelopment Operations

October 5, 2010

RAS AL KHAIMAH, UAE, October 5, 2010 /PRNewswire/ — RAK Petroleum Public
Company Limited, the oil and gas exploration and production company, today
signed an agreement with the Ras Al Khaimah Gas Commission(Rakgas) to take a
100 percent stake in and operatorship of the Saleh field offshore the Emirate
of Ras Al Khaimah in exchange for 100,000,000 shares in RAK Education Company
(EDRAK). RAK Petroleum already holds a 40 percent interest in the currently
non-producing gas and condensate field.

(Photo: http://www.newscom.com/cgi-bin/prnh/20101005/412800 )

Today’s signing ceremony was attended by His Highness Sheikh Saud Bin
Saqr Al Qasimi
, Crown Prince and Deputy Ruler of the Emirate of Ras Al
Khaimah
, Bijan Mossavar-Rahmani, Chairman and Chief Executive Officer of RAK
Petroleum and RuurdSybrenAbma,Chief Operating Officer, Rakgas as well as
directors and officers of RAK Petroleum.

“We are pleased to have RAK Petroleum strengthen its commitment to
development of the offshore oil and gas sector of Ras Al Khaimah,” said
Sheikh Saud Bin Saqr AlQasimi.

“This Exchange Agreement with Rakgas and the Government of Ras Al
Khaimahprovides us with an expanded presence in an area where we have
considerable experience and heritage, while refocusing RAK Petroleum’s
balance sheet on our core business,”said Bijan Mossavar-Rahmani, Chairman of
the Board of Directors and Chief Executive Officer of RAK Petroleum.

In outlining the Company’s redevelopment plans for the field,
Mossavar-Rahmani noted that RAK Petroleum had recently completed a fresh look
at the Saleh field through new reservoir studies and was encouraged to
revisit the opportunities for rejuvenation of the field.

“Advances in technology as well as in oil and gas prices have regenerated
our interest in the remaining potential of thisfield,” said Mossavar-Rahmani.

The Saleh field was discovered by Union Oil Companyin 1964 but an
appraisal well drilled by Gulf Oil Company in 1982 led to the development of
the field and startup of production in January 1984. Production came
fromsevenproducing wells from fiveplatforms. A total of 109 billion cubic
feet of gas and 14.4 million barrels of condensate were produced between1984
and1988. Small volumes of gas and condensate have been produced
intermittently since then. An existing 18 inch, 45 kilometer pipeline links
the Saleh field to the Rakgas gas and liquids processing facilities onshore
Ras Al Khaimah.

The Company expects to begin redevelopment of the Saleh field in the
first half of 2011 by deepening an existing well to the Thamama reservoir. As
part of the Exchange Agreement, Rakgas is being offered a back-in right,
exercisable during a three-month window following completion of the first
Saleh well, for a 30 percent participation upon payment of 30 percent of the
well costs.

The EDRAK shares were purchased by RAK Petroleum in 2006 at its founding
and represent 37 percent of the outstanding shares of EDRAK which is engaged
in providing educational and health facilities for foreign universities and
hospitals.

RAK Petroleum Public Company Limited is registered in the Free Trade Zone
of the Emirate of Ras Al Khaimah and is operator of seven blocks in the
Sultanate of Oman and in the United Arab Emirates, of which one is in the
production phase, three are in the exploration phase, and three are
undergoing appraisal for possible development/redevelopment. RAK Petroleum
also has a non-operating 30 percent interest in the Hammamet Offshore license
in Tunisia and a 30 percent shareholding in the publicly-traded Norwegian oil
and gas company DNO International ASA (http://www.dno.no), whose principal
producing properties are located in the Kurdistan Region of Iraq and the
Republic of Yemen.

SOURCE RAK Petroleum


Source: newswire



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