BP, Oman Oil Extend Block 61 License, Pave Way for Khazzan Development

BP and Oman Oil Company Exploration & Production signed Tuesday an agreement with the Government of the Sultanate of Oman to extend the Oman Block 61 exploration and production sharing agreement (EPSA) license area, paving the way for further development of the giant Khazzan gas field.

Under the amended EPSA, the extension adds more than 386 square miles to the south and west of the original 1,042 square miles of Block 61. The extension will allow a second phase of development, accessing additional gas in the area already identified by drilling activity within the original block. Development of this additional resource is subject to final approval of the Government of Oman and of BP, both expected in 2017.

BP is the operator of Block 61 with a 60 percent interest and Oman Oil Company Exploration & Production holds the remaining 40 percent.

The agreement was signed today in Muscat by His Excellency Dr. Mohammed Al Rumhy, Minister of Oil and Gas of the Sultanate of Oman, Bob Dudley, BP Group Chief Executive, and Eng. Isam bin Saud Al Zidjali, CEO of Oman Oil Company on behalf of Oman Oil E&P.

Dr. Mohammed Al Rumhy commented: “BP recently reached over 80 percent progression on the Khazzan project completion and is 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 realizing more gas reserves and more production of gas that our country needs to support our energy planning and requirements,” Mohammed Al Rumhy, minister of oil and gas of the Sultanate of Oman, said.

“I am very pleased to be in Muscat to sign this important agreement with our partners,” Bob Dudley, BP’s chief executive, said.

“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, 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,” he added.

The Khazzan reservoirs in Block 61 represent one of the Middle East’s largest unconventional tight gas accumulations and are expected to be a major new source of gas supply for Oman over many decades, according to BP. The Phase 1 project, sanctioned in December 2013, is more than 80 percent complete and remains on schedule to deliver first gas in late 2017. Subject to final approval, Khazzan Phase 2 project is expected to come on stream around 2020.  

Taken together, the two phases are expected to produce 1.5 billion cubic feet of gas per day through the development of 10.5 trillion cubic feet of recoverable gas resources. This will involve construction of a three-train central processing facility with associated gathering and export systems and drilling over 300 wells over a 15 year period.

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