run Oman Oil Company (OOC) is in talks with Oman's Ministry of Oil and Gas to take on an exploration block ceded by Britain's BG Group, a senior Omani oil official said on Sunday. Like most of its Gulf neighbors, Oman is short of the gas it needs to meet rapidly rising demand for industry and power. Across the region, governments have embarked on exploiting unconventional gas reserves, such as Oman's tight gas. The gas is in complex formations that is more expensive to produce than more conventional reserves. “Oman Oil Company is in discussion with the ministry of oil and gas to take over the BG concession in Oman,” Nasser al-Jashmi, undersecretary for oil and gas, told Reuters. BG pulled out of its deal to develop Oman's oil and gas Block 60 earlier this month to focus on global opportunities elsewhere. OOC is the government's energy investment arm, and holds both domestic and international oil and gas assets. It was unclear whether the government would retender the block, which BG signed up to develop in 2006, or whether it would award the acreage directly to OOC. The block covers an area of 1,500 square kilometres at Abu Butabul. BG had planned to start gas output from the block in 2012 and has already made substantial drilling investment there. Gas prices were also a factor in BG's decision to exit the block, one industry executive involved in the negotiations told Reuters on condition of anonymity.
