Nov. 14 (UPI) -- Italian energy company Eni said Tuesday it signed an agreement to look at the potential for oil and gas in an underexplored area off the coast of Oman.
The company signed the agreement with the Omani government and a consortium of state-backed oil and exploration companies for Block 52. The production sharing agreement covers nearly 35,000 square miles, where waters range from a few feet to 1.8 miles deep.
"We wish to establish with the Sultanate of Oman, which is a historical oil and gas producer in the region, a long-lasting relationship in the best tradition of Eni," CEO Claudio Descalzi said in a statement.
The agreement came about a month after British energy company BP said it would bring lessons learned from hydraulic fracturing in the United States to start production at the Khazzan natural gas field in Oman.
Hydraulic fracturing has been used for decades, though improved techniques like horizontal drilling have led to considerable production gains for oil and natural gas in the United States. The first phase of operations from the Khazzan development in Oman will plateau at 1 billion cubic feet of natural gas per day. That's about half the September rate for gas production from the Bakken shale field in the United States, the least productive shale basin for natural gas in the country.
Eni gave no indication of what it expected from Block 52.
A profile of production from economists at the Organization of Petroleum Exporting Countries said it expected oil output from Oman to decline by about 4,000 barrels per day for the year. Most of the non-OPEC growth is expected from the United States.
The Italian company assigned a 30 percent working interest to Qatar Petroleum during the signing ceremony in Oman. Qatar Petroleum said both sides would work on executing a preliminary work plan that involves seismic surveys to get a better understanding of the reserve potential, followed by exploration drilling at some point in the future.