BP widens natural gas project in Oman

By Staff Writer

Feb 15, 2016 12:45 AM EST

BP Plc, a London-based oil and gas firm, said that it has entered into a 'heads of agreement' with the Oman government in order to widen the license area of Block 61. The deal will also allow BP to enhance development in Khazzan gas ground. The total cost of the whole project is expected to be about $16 billion.

As per the terms of the modified 'exploration and production sharing agreement (EPSA)', the Block 61 will be further extended to cover more than 1000 kmto the west and south of the previous block area of 2700 km2.  This move will enable a second stage of growth in that area where surplus resources have been recognised through drilling activity.

BP and the Oman government are yet to approve the expansion of this surplus resources and that is anticipated to take place in 2017. This deal was signed by oil and gas minister of Oman, His Excellency Dr. Mohammed Al Rumhy, CEO of BP Group, Bob Dudley and Oman Oil E&P executive managing director, John Malcolm.

The Khazzan gas reservoirs have the capacity to be a main gas source for more than several decades and it ensures continuous long-term gas supply for Oman. Combined production from phase 1 and phase 2 is anticipated to be about 1.5 billion cubic feet per day, which is equal to Oman's present gas production of about 40%.

Distribution of first gas supply from phase 1 project is scheduled in late 2017 and the new phase 2 project is anticipated to commence from 2020. The phase 2 project will involve drilling of nearly 325 wells and building of 3 train chief processing plant with export and gathering systems for a period of 15 years.

In 2013, local gas intake in Oman amounted to 774 billion cubic feet, up from 520 billion cubic feet over 2009, Bloomberg said quoting data from the US Energy Information Administration. Oman, which imports gas from Qatar through a pipeline, is currently discussing with Iran to construct a channel across the Gulf of Persia. The government of Oman is also investigating routes for LNG import in order to produce power, according to Bloomberg.

BP also noted that it is investing for the growth of mid-career workers and graduates in Oman. The oil and gas company owns 60% interest in Block 61 while the remaining 40% is controlled by Oman Oil.

The renewable sources are expected to account for just 9% of the global net energy requirements within 2035, Clean Technica said quoting an outlook report from BP. As per the forecast, the total energy demand in the world will rise about 34% during the period between 2014 and 2035.

The company strengthens its commitment in Oman with a view to broadening its business in the country. BP is examining all means to develop the production of gas in order to meet the global demand and its present investment in Oman supports this idea.

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