November 24, 2008 / 2:02 PM / 9 years ago

UPDATE 1-Occidental, Mubadala to develop Oman gas fields

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NEW YORK, Nov 24 (Reuters) - Occidental Petroleum Corp (OXY.N) and Abu Dhabi investment firm Mubadala Development Co have signed an exploration and production sharing agreement with the Sultanate of Oman, the companies said in a joint release on Monday.

The agreement allows the parties to develop four existing gas fields and explore for new discoveries in a newly formed contract area in Northern Oman. The 20-year agreement covers an area of 2,269 square kilometers (876 square miles).

Occidental will serve as operator under the agreement and hold a 48 percent interest, with Mubadala holding 32 percent and the Oman Oil Company holding the remaining 20 percent.

Total capital investment in the contract area is expected to be about $500 million over the next four years.

The companies expect exploration, appraisal and development activities to begin immediately, while natural gas production from the area is expected to begin in 2010 and plateau at 27,500 barrels of oil equivalent per day (boepd) by the end of 2011.

Occidental's net share of production at plateau is expected to be about 10,000 boepd, with Mubadala's net share around 6,000 boepd. (Reporting by Euan Rocha; Editing by Steve Orlofsky)

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