BP and Oman sign deal to amend Oman Block 61 exploration and production sharing agreement
BP and Oman Oil Company Exploration & Production (OOCEP) have signed a deal with the Government of the Sultanate of Oman that amends the Oman Block 61 exploration and production sharing agreement (EPSA).
The amended agreement extends the license area, which will enable further development of the Khazzan tight gas field.
The revised EPSA adds 1,000km² to the south and west directions from the original 2,700km² of Block 61.
This extension will help to initiate the second phase of development and access new gas sources that were discovered by earlier drilling activity. However, the development of this new resource is subject to final approvals from the Government of Oman and BP, both of which are expected in 2017.
BP holds 60% interest in Block 61 with the operating responsibility, while OOCEP holds the remaining 40% interest.
The agreement was signed in Muscat by Oman Minister of Oil and Gas Dr Mohammed Al Rumhy, BP Group chief executive Bob Dudley and Oman Oil Company CEO Isam bin Saud Al Zidjali.
Al Rumhy said: “BP recently reached more than 80% progression on the Khazzan project completion and on track to deliver first gas near the end of 2017, and I am delighted to see BP taking additional acreage that will result in realising more gas reserves and more production of gas that our country needs to support our energy planning and requirements.”
Dudley stated: “I am very pleased to be in Muscat to sign this important agreement with our partners. BP is proud to expand our cooperation in the Khazzan project, which will be the major source of energy for the Omani economy for decades to come.
“This expansion will build on our work on the first phase of working closely with our Omani partners and demonstrates our commitment to invest in a significant project that will deliver long-term value to both Oman and BP.”
The Khazzan reservoirs in Block 61 are one of the largest unconventional tight gas accumulations in Middle East. It is expected to become a new source of gas supply for Oman.
The Phase 1 project was approved in December 2013 and is more than 80% complete. It is scheduled to deliver first gas in late-2017.
Subject to final approval, Khazzan Phase 2 project is expected to start functioning from 2020.