MB Petroleum - Block 5

completed

Mazoon Petrogas SAOC (Mazoon or the Company) is engaged in exploration and production of oil and gas. Mazoon and its 50/50 joint operating partner, Mazoon Petrogas BVI Limited (MPBVI) (an indirect wholly-owned subsidiary of China National Petroleum Corporation), explore and produce crude oil in Block-5 through a joint operating company, Daleel Petroleum LLC (the Operator). The Operator has proposed a US$331 million Development Plan, which Mazoon and MPBVI will jointly fund. The Development Plan proposes to further develop Block-5 and to more than double current crude oil production of 12,000 barrels of oil per day (bopd) by way of waterflood. This proposed project is an expansion of a brown-field investment and consists of financing a small portion of Mazoon’s 50% share (US$165.5 million) of the capital expenditures envisioned under the Development Plan. Block-5 contains the Daleel, Mezoon, Shadi and Bushra fields. The largest and most explored field is the Daleel field, which extends from the north to the south of Block-5. This field is further subdivided into five main zones: A, B, C, D and E. The Development Plan calls for the further development of mainly zones B and C. The major Project components of the Development Plan include: (i) further development of the water-supply wells at Masruq (an area twenty-one kilometers from zone B); (ii) water-supply pipeline from Masruq to the B-Block Station (location in zone B housing many of the major Project components); (iii) water-injection equipment; (iv) associated power generation and distribution facilities for the water-supply and water-injection systems; (v) gathering system for new zone B and C production wells; (vi) gas and water separation facilities at B-Block Station; (vii) produced water treatment facility; and (viii) pumping facilities to route separated crude oil from B-Block Station to the main Daleel Gathering Station. Furthermore, the Development Plan calls for the acquisition and the processing of new 3D seismic and the drilling of over ninety appraisal/producer and fifty-six water-injection wells.