BP and Oman Oil sign agreement to expand scope of Khazzan gas field

BP and Oman Oil have signed an agreement with the Government of Oman to extend the scope of Khazzan tight gas field, facilitating development of second phase.

Under the amended agreement, the licence area of Block 61 will be extended by more than 1000km² to the south and west of the original 2,700km² of the block.

BP operates the block with a 60% interest and Oman Oil holds the remaining 40%.

The latest development will access additional resources in the area identified by drilling activity within the original block and is subject to final approval of the Government of Oman and of BP.

BP Group chief executive Bob Dudley said: "Khazzan is a major resource with the potential to produce gas for Oman for decades.

"This expansion of its development will build on the success we are already seeing in our work on the first phase, working closely with our Omani partners and applying BP’s leading technology and extensive tight gas experience."

Production from Khazzan field will ensure continuing stable and long-term domestic supplies of gas for Oman.

Combined plateau production from first and second phases is expected to total about 1.5 billion cubic feet of gas a day (bcf/d).

The phase 1 project was sanctioned in December 2013 and is set to deliver first gas in late 2017.

The new Khazzan phase 2 project will become operational from 2020.

The two phases are expected to involve investment of $16bn and set to produce 1.5 bcf/d by developing 10.5 trillion cubic feet of recoverable gas resources.

During this time, a three-train central processing facility with associated gathering and export systems would be constructed in addition to drilling around 325 wells for 15 years.