BP Oman Awards $730M Drilling Contracts for Oman's Khazzan Project

BP Oman announced Wednesday that the firm has awarded two long term drilling contracts for the Khazzan project in Block 61 in Oman.

KCA Deutag has been awarded more than $400 million contracts for the construction and operation of five new build land rigs for Khazzan. The rigs are being assembled in Nizwa to help maximize employment opportunities in Oman.

According to the second agreement, Oman’s Abraj Energy Service has been awarded more than $330 million contracts to supply three drilling rigs for the full field development of the Khazzan Project.

“We are pleased to announce these contracts which continue to progress our development of the gas resources at Block 61. Abraj Energy Service and KCA Deutag will play important roles in the massive drilling program ahead. The selection of Abraj Energy Services demonstrates once again BP’s commitment to In Country Value,” said BP Oman General Manager Dave Campbell.

Khalid Al Kindi, deputy general manager for BP Oman, stated, “Building local content into our supply chain is a key focus area in BP’s procurement strategy. BP is committed to hiring and developing talented Omanis. We are also implementing a significant multi-million dollar long term social investment strategy to support education and enterprise development in Oman. All these are part of our commitment to deliver BP’s In-Country Value Plan (ICV)”

Since the approval of the Khazzan Project development, BP has been actively awarding contracts to ensure that the project meets its deadlines. In addition to the announced contracts awarding, several contracts with a value around $90 million have been awarded to local Omani companies for civil works, including well pads and in-field roads. More recently, BP awarded contracts with a value of around $16 million to several Omani companies to supply carbon steel pipes and to manufacture, supply and install a water pipeline. The water pipeline will be manufactured in Sohar.

Sanctioned in December 2013, the Khazzan Project represents the first phase in the development of one of the Middle East region’s largest unconventional tight gas plays. Khazzan has the potential to be a major new source of gas supply for Oman for many decades.