Oman, BP Reach Tight Gas Deal

Oman has reached a “conceptual agreement” with BP for the development of tight gas reserves in Block 61, Oman Daily Observer reported.

“We are making progress,” said Dr Mohammed bin Hamad al Rumhy, Minister of Oil and Gas, when asked about efforts by the Omani government and the energy giant towards a long-hoped-for Declaration of Commerciality on the development of the block.

As per the deal, BP has to declare commerciality by February next year. Therefore the two parties have to finish discussions before then, for them to proceed to the next step, which is (commercial) development, the newspaper said.

The Khazzan-Makarem field is estimated to have 100 – 150 trillion cubic feet (TCF) of gas in place, of which around 7.6 TCF of gas is earmarked for initial development upon the signing of a Declaration of Commerciality. Production is targeted at 1–1.2 billion standard cubic feet of gas per calendar day by 2017–18, Oman Daily Observer said. .

Commercial development is envisaged in three phases. Phase 1 will kick in by 2017, while Phase 2 will target a ramp up in gas production of an additional 1 billion standard cubic feet of gas per calendar day to ensure constant supply to major gas users.