BP to invest in Oman field

BP has signed an agreement to invest USD 16 billion in the Khazzan natural gasfield along with state-run Oman Oil, the UK petroleum giant said in a press release yesterday.

The accord will add 1,000 sq.km to the original 2,700 sq.km of Block 61. Production should commence in 2017. By 2020, the companies hope to be producing 42.5 mcm (1.5 bcf) per day, almost 40% of Oman’s current output. More than 325 wells are set to be drilled over the course of the project. The project will involve tapping into tight gas trapped in impermeable rocks through hydraulic fracturing.

The project will require approval of Oman’s government, which is expected in 2017.

BP operates the block with 60% interest, while Oman Oil holds the remaining 40%.

Oman exports LNG to Spain, Japan and South Korea and is looking to begin importing LNG to meet energy demand. In 2013, public consumption grew to 21.9 bcm (774 bcf) from 14.7 bcm (520 bcf) in 2009, according to the US Energy Information Administration.