RAK Petroleum, the oil and gas exploration and production company based in Ras Al Khaimah, has signed an agreement with the Ras Al Khaimah Gas Commission (Rakgas) to acquire 100 per cent stake in the emirate's Saleh gas field.

The company has taken over the operatorship of the offshore field based in Ras Al Khaimah in exchange for 100 million shares of RAK Education Company (Edrak), said a RAK Petroleum statement.

RAK Petroleum already holds a 40 per cent interest in the currently non-producing gas and condensate field.

'We are pleased to have RAK Petroleum strengthen its commitment to development of the offshore oil and gas sector of Ras Al Khaimah,' said Sheikh Saud Bin Saqr Al Qasimi, Crown Prince and Deputy Ruler of Ras Al Khaimah, at the signing ceremony.

Bijan Mossavar-Rahmani, chairman and chief executive officer of RAK Petroleum and RuurdSybrenAbma, chief operating officer, Rakgas were also present at the ceremony.

'This exchange pact with Rakgas and RAK government provides us with an expanded presence in an area where we have considerable experience and heritage, while refocusing RAK Petroleum's balance sheet on our core business,'said Bijan Mossavar-Rahmani, chairman of board of directors and chief executive officer of RAK Petroleum.

On the redevelopment plans, Mossavar-Rahmani said RAK Petroleum had recently completed a fresh look at the Saleh field through new reservoir studies and was encouraged to revisit the opportunities for rejuvenation of the field.

'Advances in technology as well as in oil and gas prices have regenerated our interest in the remaining potential of thisfield,' said Mossavar-Rahmani.

The Saleh field was discovered by Union Oil Company in 1964 but an appraisal well drilled by Gulf Oil Company in 1982 led to the development of the field and startup of production in January 1984.

Production came from seven producing wells from five platforms. A total of 109 billion cubic feet of gas and 14.4 million barrels of condensate were produced between 1984 and 1988.

Small volumes of gas and condensate have been produced intermittently since then. An existing 18 inch, 45 kilometer pipeline links the Saleh field to the Rakgas gas and liquids processing facilities onshore Ras Al Khaimah.

According to him, RAK Petroleum expected to begin redevelopment of the Saleh field in the first half of 2011 by deepening an existing well to the Thamama reservoir.

'As part of the exchange agreement, Rakgas is being offered a back-in right, exercisable during a three-month window following completion of first Saleh well, for a 30 per cent participation upon payment of 30 per cent of the well costs,' Mossavar-Rahmani added.

The Edrak shares were purchased by RAK Petroleum in 2006 at its founding and represent 37 per cent of the outstanding shares of the company engaged in providing educational and health facilities for foreign universities and hospitals in Ras Al Khaimah.-TradeArabia News Service