2009-08-15-2009-01-01-2009-01-01

JV to develop 4 existing gas fields in newly formed contract area in northern Oman.

Occidental Petroleum Corp., Los Angeles, (NYSE: OXY) has entered a joint venture in Oman with Mubadala Development Company of Abu Dhabi to develop four existing gas fields and explore for potential new discoveries in a newly formed contract area in northern Oman. The 20-year agreement covers 2,269 square kilometers. Oxy will be operator and hold a 48% interest, with Mubadala holding 32% and Oman Oil Co. holding 20%. Ray R. Irani, Occidental chairman and chief executive, says, "Signing this exploration and production sharing agreement 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.'" Khaldoon Khalifa Al-Mubarak, Mubadala chief executive and managing director, says, "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." Production from the area is expected to begin in 2010 and reach approximately 165 million cubic feet per day (27,500 barrels equivalent) by year-end 2011. Oxy's net share of production is expected to be approximately 10,000 barrels per day, with Mubadala's net share of approximately 6,000 barrels. Total capital investment is expected to be approximately $500 million over 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.