Oman’s state-backed energy group OQ Exploration & Production (OQEP) is intensifying development across its upstream portfolio, aiming to bolster its contribution to the national economy through increased oil and gas output.

The publicly traded company, which holds interests in 15 licences, reported an average production of 221,200 barrels of oil equivalent per day (boepd) in the first quarter of 2025, accounting for 14% of Oman’s total hydrocarbon production. In a recent update to the Muscat Stock Exchange, senior executives outlined a strategy focused on expanding existing assets and unlocking the potential of new acreage.

The centrepiece of this drive is Block 60, OQEP’s flagship producing asset, where a major expansion has just been completed. “We are happy to announce that the Block 60 expansion has been delivered ahead of time and on budget,” said Dr Anwar al Kharousi, OQEP’s commercial CEO. “With that, we have added an extra oil processing capacity of about 37,000 bpd, which will be used to connect our wells into the system, leading to an increase in production by about 10%.”

He noted the upgrade would also allow the company to connect more high water-cut wells to its processing station. Further growth projects for the block are now under consideration, pending government approval.

On the gas front, OQEP is working with operator BP to expand output from Block 61, which already supplies a third of Oman’s gas. The company, which holds a 30% stake, is advancing a new field development plan. “We are now preparing to take the discussion forward for additional gas production, which will support the planned additional LNG capacity,” Dr Al Kharousi said, referencing a fourth LNG train project expected to be finalised by early 2026.

Exploration activities are also progressing across the portfolio. A new well is being tested in Block 8 offshore Musandam, while an early well test is planned for late 2025 or early 2026 in Block 54, a partnership with the UK’s Genel Energy.

However, the inherent uncertainty of exploration was highlighted at Block 47, operated by Italy’s ENI. A new exploration well, Najid-1, has been drilled, but the results require careful study. With the block’s contract expiring in September, an extension is needed.

“The well has just reached the planned target depth; now we need to analyse and study the results,” Dr Al Kharousi explained. “We need at least a six-month extension beyond September to allow the operator and OQEP to conclude the study… That will determine whether we proceed with re-testing… or whether we leave the block altogether.”

For the full year 2025, OQEP forecasts production to be in the range of 220,000–230,000 boepd, with capital expenditure projected at between $700mn and $1bn.