BP has a long history of oil and gas exploration and production in the Middle East. It is a major investor in Oman and one of the world’s pioneers in tight gas production, bringing technology and experience to develop one of the Middle East’s largest unconventional gas resources – the Khazzan field. The total gas produced from Khazzan will eventually deliver around a third of Oman’s current daily domestic gas supply, making a significant contribution to ensure stable supplies from domestic sources.
On 16th December 2013, BP and the Government of the Sultanate of Oman signed an amended production sharing agreement (EPSA) for the development of the Khazzan field in Block 61, which was later ratified by Royal Decree. On 14th February 2016, the EPSA was amended to extend the license area of the block and enable further development of additional resources identified by drilling activity. More recently, on 8th November 2016, BP and the Sultanate of Oman have signed extended licensing agreements, paving the way for the second phase of the Khazzan project.
To develop Khazzan, BP formed a joint venture with Oman Oil Company Exploration and Production (OOCEP), where BP is the Operator of Block 61 and holds a 60% interest, and OOCEP holds a 40% interest. Khazzan is on track to deliver First Gas towards the end of 2017 by producing 1 billion cubic feet of gas and 25,000 barrels of condensate per day. This will be fed into existing pipeline infrastructure for distribution. This figure is expected to rise to 1.5 billion cubic feet of gas per day by 2020 once the second phase of development is completed.
The field is estimated to have 10.5 trillion cubic feet of recoverable gas reserves located in extremely old, dense and hard rocks some five kilometres beneath the surface. Both drilling through the rock and the hydraulic fracturing needed to coax the gas into a borehole and out of the well require advanced expertise and technology. Around 300 wells – a mixture of vertical and horizontal – will need to be drilled and several hundred kilometres of gathering pipelines installed over the estimated 30 year life of the project.
BP Oman is committed to delivering In Country Value (ICV), focusing not only on helping the communities in which it works, but also on demonstrating support for Oman and its people, BP partners and the supply base as a whole. Its work in this area will underpin existing BP operations in the country as well as helping to build local capabilities, provide community investment and forge strong relationships with the Government and operating partners.