BP signs $16bn gas sales agreement with Oman

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Source: Energy Institute (EI)

BP has announced that it signed a gas sales deal with the government of the Sultanate of Oman yesterday (16 December), which amends the production sharing agreement for the development of the Khazzan field.The full agreement is worth some $1bn (£9.8bn) - and this includes an appraisal of the resource and early well test programme.

A drilling programme of around 300 wells will be involved with the full field development - and this project is expected to last 15 years. It is hoped that plateau production will stand at 28.3mn cm of gas per day and 25,000 b/d of gas condensate within the time frame. This represents approximately one-third of Oman's total daily domestic gas supply, so the agreement will make a major contribution to ensuring continuing stable supplies from domestic sources.

Construction work for the Khazzan project is set to begin next year, with the first gas to be produced by the end of 2017. Group chief executive officer of BP Bob Dudley said that he is very pleased on behalf of his organisation to be undertaking such an important project, as it is 'very important for both Oman and for BP'.

'This [agreement] enables BP to bring to Oman the experience it has built up in tight gas production over many decades,' Mr Dudley commented, adding: 'This is one more example of BP developing a long term gas supply chain, in this case to bring energy to customers in Oman for decades to come.'

President of BP in the Middle East Region David Dalton said this sanction has come after an appraisal programme, which he described as 'extensive and rigorous'.

Mr Dalton emphasised how beneficial the process has turned out to be, as it has given both his firm and the government of Oman greater confidence in the strength of the programme.

The topic of gas is a key theme discussed at the Energy Institute's IP Week conferences:
Global energy outlook: future growth scenarios
Are we heading for a golden age for gas?
World Petroleum Council (WPC) UK National Committee Expert Workshop: Challenges and opportunities in global oil and gas finance

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