BP has signed a gas sales deal and a production sharing agreement with Oman’s Ministry of Oil and Gas to develop the US$16bn Khazzan tight gas project onshore Block 61
According to Reuters, BP will drill 300 wells to flush gas trapped deep under the Omani desert over the next 15 years for the project. The gas sales deal is for a period of 30 years.
The Khazzan tight gas project aims to extract around 28.3mn cubic metres of gas per day from sandstone at depths of up to 4,500 metres in central Oman. BP will extract the gas using its hydraulic fracturing technology.
The UK oil and gas explorer will have a 60 per cent stake in the project and state-owned Oman Oil Company Exploration and Production (OOCEP) will own the remaining 40 per cent, according to ministry sources.
Oman’s minister of oil and gas Mohammed Al Rumhy said, “The deals are an important step towards meeting the growing demand for energy in Oman over the coming decades. The will contribute towards the economic development of the country.”
BP chief executive officer Bob Dudley added that the price which BP and the Ministry of Oil and Gas have agreed upon in the gas-sales agreement was competitive as per BP’s global investment portfolio.
Construction at the project site is expected to commence in early 2014, while first gas extraction is expected in late 2017. BP and the Ministry of Oil and Gas expect plateau production to start in 2018.
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Oman and BP production sharing agreement for onshore Block 61 edges closer
