BP to invest in Oman’s gas Block 61

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BP Oman has completed an extended well testing (EWT) programme of the gas-rich Block 61 concession in Northern Oman with the oil giant estimating that it will invest up to US$15 billion in the field.

The "very encouraging" results announced by BP during its EWT programme moves the company closer to submitting a full field development plan for the gas-rich fields which includes the Khazzan and Makarem fields.

The proposed investment of US$15 billion is subject to a declaration of commerciality slated before the end of next year.

“For BP this is exceptionally good news ahead of negotiations, although it does not mean that the company will be in a position to dictate terms according to its own wishes,” commented Samuel Ciszuk, IHS Senior Middle East Energy analyst.

"This will be a very large project and will require approximately US$15 billion in capital investment from BP to make that happen. About US$10 billion of that will go into the drilling of wells and the rest will go for surface facilities," Dr Jonathan Evans, Vice-President of BP Oman was quoted as saying by the Oman Observer.

Significantly, the investment will target part of the estimated 30 tcf of tight gas trapped in deep reservoirs at depths of between 4,500-5,000 metres within BP's Block 61 concession.

In the first phase the project will target 7-8 tcf of gas, with other reserves within the concession planned for development in subsequent phases. With projected output averaging 1.2 billion bcf per day, the Khazzan project has the potential to significantly scale up Oman's total gas supply currently pegged at around 3 bcf per day.

The appraisal wells, compression stations, and other infrastructure facilities are part of an investment of US$600mn already made by BP over the past four years as part of the appraisal phase of its exploration and development programme.

The EWT facility currently produces about 60 mcf per day of gas from the three wells in question. With the planned connection of a further two more wells later this year, production will be upped to the plant's capacity of 70 mcf per day.

The project will be mostly based in the southern part of Block 61 covering an area of around 1,000 sq-km, said Dr Evans, adding that first gas from the full field development is targeted during the 2016 - 2017 timeframe.

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