BP, Oman Agree on Khazzan Gas Price

BP has agreed a price for any gas produced from Oman's Khazzan project as part of a commercial framework agreement with the government, the energy company said on Thursday, Reuters reported.

“We are pleased to have reached a price agreement that is acceptable to the government of Oman and delivers value to BP,” Reuters quoted a spokesman for the company. The spokesman declined to give the agreed gas sales price.

BP has been negotiating for months over the price it will get for selling any gas produced from the Khazzan tight gas project to the local market.

In January 2007 BP signed a major exploration and production sharing agreement with the government of Oman for the appraisal and development of Block 61 and the Khazzan and Makarem gas fields. The agreement covers an area of some 2,800 square kilometres in central Oman, which contains a number of 'tight gas' reservoirs which were first discovered in the 1990s.

According to BP, full field development of the resource, when sanctioned, will involve drilling around 300 wells, with first gas planned for 2016-17.