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BP postpones Oman investment decision to 2013

Exploration & Production

BP will make a final decision on whether to go ahead with a potential US$15 billion investment in Omans Khazzan tight gas project in February 2013, Jonathan Evans, general manager of BP Oman said recently.

BP, which won the concession in 2007 and has spent about US$700mn to date, will unveil a field development plan including expected costs in early 2012, Jonathan Evans said.

The plan will serve as the basis for gas sales agreement talks with the Omani government next year.

"The final investment decision is in early 2013," Evans said. "If we don't reach an agreement by then, we either have to ask for an extension or do something else."

The Omani government has said the gas must be sold in the sultanate where sale prices are controlled. Huge price subsidies in the energy sector are common in the Middle East.

"The project will make a lot of money for Oman; we need to find a way to get a big enough piece of it for BP to make sense as an investment," Evans added.

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