Malaysia’s Petroliam Nasional Berhad (Petronas) has announced that its subsidiary would buy a 10 per cent stake in Oman’s Al Khazzan gas field, following a bidding exercise held by the exploration arm of state-owned Oman Oil Company
The Petronas unit, PC Oman Ventures Ltd, would acquire the stake in Oman Oil Company Exploration and Production (OOCEP), a subsidiary of Oman Oil Company, in block 61 of the field, which is expected to produce around 42.4 million cubic metre (mcm) of natural gas per day by 2020.
Max Petrov, from Wood Mackenzie’s corporate analysis team, said, “Petronas is no stranger to Oman, having held exploration acreage adjacent to Khazzan until 2014. The announcement highlights Petronas’ strong appetite for international business development and gas resource capture, coming less than six months after it joined Shell's LNG Canada project.”
He further said, “We believe the company is buying into the project for its strong gas reserves potential. The size of resource on Block 61 means that future phases could be developed, beyond the current expansion, provided the partners can secure a buyer for the additional gas.”
Petrov added that the development would contribute 2 per cent of Petronas’ global output by 2023.
Liam Yates, from WoodMac’s Middle East upstream team, added, “The deal could be worth in excess of US$1.3bn to OOCEP, Oman's state-owned oil company. The consideration will be important for the company as spending on Khazzan's second phase, Ghazeer, ramps up.
“OOCEP paid US$136mn for the equivalent 10 per cent stake in 2013 when the first phase of development was sanctioned. The stake is now worth US$1.3bn. The value reflects the significant cost savings achieved and reserves expansion following sanction of the second phase of development earlier in 2018,” added Yates.
He said, “Khazzan recently celebrated one year of gas delivery in Oman, with field output around 28.3 mcm per day. When Ghazeer comes onstream in the early-2020s, output will increase to 42.4 mcm per day.”
