The agreement was signed by His Excellency Mohammed Bin Hamad Al Rumhi, Minister of Oil and Gas, Sultanate of Oman and Tony Hayward, BP's CEO for Exploration and Production and recently designated Group Chief Executive.
The agreement covers an area of some 2,800 square kilometers in central Oman, including the Khazzan and Makarem gas fields which were discovered in 1993 but have remained undeveloped due to the complexity of their 'tight gas' reservoirs.
As one of the world's leading specialists in the production of tight gas, BP will apply innovative technology and proprietary expertise to unlock output hitherto trapped in scattered, low-permeability rock.
At a signing ceremony today in the Omani capital, Muscat, His Excellency Dr. Al Rumhi, said "We welcome BP to Oman on this important project where new technology is key and we look forward to some early results and a long and productive relationship."
"This is a very significant deal for BP which will potentially add a large new gas province to our global portfolio", Dr. Hayward explained.
"We are delighted to be working on such a large project with Oman. BP has extensive tight gas operations elsewhere in the world and this gives us a great opportunity to transfer our expertise and technology to Oman.
"We look forward to working with the Government of Oman in long-term partnership to develop these deposits for the benefit of the nation."
BP will conduct a comprehensive multi-year appraisal program to understand the nature of the reservoirs. Early production is expected to begin around 2010 during the latter stages of the appraisal study, followed by full field development.
The natural gas produced will be marketed by the Government of Oman.
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