MUSCAT, Oman, Nov. 24, 2008 (GLOBE NEWSWIRE) -- Occidental Petroleum Corporation (NYSE:OXY) and Mubadala Development Company of Abu Dhabi (Mubadala) today announced the signing of an Exploration and Production Sharing Agreement ("EPSA") with the Ministry of Oil and Gas in the Sultanate of Oman. Under the terms of the EPSA, the parties will develop four existing gas fields and explore for potential new discoveries in a newly formed contract area ("Habiba" - Block 62) in Northern Oman. The 20 year agreement covers a 2,269 square kilometre area.
Oxy will serve as operator under the EPSA and hold a 48-percent interest, with Mubadala holding a 32-percent interest and the Oman Oil Company holding the remaining 20 percent.
"We are pleased to expand upon our existing relationship with Oman and look forward to working with our partners to help ensure that future supplies of natural gas will be available to fuel Oman's economic growth," said Dr. Ray R. Irani, Chairman and Chief Executive Officer of Occidental. "Signing this EPSA is another important step in the implementation of our growth strategy within the region. The development of the substantial natural gas resources contained within the contract area will create significant value for the people of Oman and for our shareholders."
"This EPSA is a logical expansion of our energy portfolio in Oman and we are pleased to build upon our long-standing partnership with Oxy in this new venture," said Khaldoon Khalifa Al-Mubarak, CEO and Managing Director of Mubadala. The project is another example of Mubadala's strategy of leveraging Abu Dhabi's history and experience as a trusted energy supplier to build a diverse range of energy related businesses in the UAE and internationally."
Exploration, appraisal and development activities will commence immediately. Production from the area is expected to begin in 2010 and reach a plateau of approximately 165 MMscfd (27,500 boepd) by year end 2011. Oxy's net share of production at plateau is expected to be approximately 10,000 boepd; with Mubadala's net share around 6,000 boepd.
Total capital investment in the contract area is expected to be approximately $500 million over the next four years. In addition to the field developments, this investment will include up to nine exploration wells over a six year exploration period to test the upside potential of the shallow and deep gas plays found in the region.
About Oxy
Occidental Petroleum Corporation is an international oil and gas exploration and production company with operations in the United States, Middle East/North Africa and Latin America regions. Oxy is the fourth largest U.S. oil and gas company, based on equity market capitalization. Oxy's wholly owned subsidiary, OxyChem, manufactures and markets chlor-alkali products and vinyls. Occidental is committed to safeguarding the environment, protecting the safety and health of employees and neighboring communities and upholding high standards of social responsibility in all of the company's worldwide operations.
About Mubadala Development Company
Mubadala Development Company (Mubadala) is a Public Joint Stock Company headquartered in Abu Dhabi, capital of the United Arab Emirates. Its focus is on developing and managing an extensive and economically diverse portfolio of commercial initiatives. It does this either independently or in partnership with leading international organizations. Mubadala's commercial strategy is fundamentally built on long term capital intensive investments that deliver strong financial returns.
The company manages a multi-billion dollar portfolio of local, regional, and international investments, projects and initiatives. Through its investment and development projects, Mubadala is both a catalyst for, and a reflection of, the drive for economic diversification of the Emirate of Abu Dhabi. Its impact is evident domestically and internationally in sectors such as energy, aerospace, real estate, healthcare, technology, infrastructure, and services.
Mubadala's sole shareholder is the Government of the Emirate of Abu Dhabi. For more information about Mubadala, its partnerships and activities, please visit www.mubadala.ae.
Forward-Looking Statements
Statements in this release that contain words such as "will," "expect" or "estimate," or otherwise relate to the future, are forward-looking and involve risks and uncertainties that could significantly affect expected results. Factors that could cause results to differ materially include, but are not limited to: exploration risks, such as drilling of unsuccessful wells, global commodity pricing fluctuations and supply/demand considerations for oil and gas; higher-than-expected costs; operational interruptions; political risk; and not successfully completing (or any material delay in) any capital expenditure. You should not place undue reliance on these forward-looking statements which speak only as of the date of this filing. Unless legally required, Occidental does not undertake any obligation to update any forward-looking statements as a result of new information, future events or otherwise. U.S. investors are urged to consider carefully the disclosure in Occidental's Form 10-K, available through the following toll-free telephone number, 1-888-OXYPETE (1-888-699-7383) or on the Internet at http://www.oxy.com. You also can obtain a copy from the SEC by calling 1-800-SEC-0330.