(EnergyAsia, December 20 2013, Friday) — Oman has awarded separate contracts to UK’s BP to develop onshore unconventional gas reserves and France’s Total to explore for hydrocarbons in a deepwater offshore area, the two companies have announced.
BP said it will invest US$16 billion to drill 300 wells over 15 years as part of its plan to develop the Khazzan field to produce one billion cubic feet (28.3 million cubic metres) of gas per day and 25,000 b/d of gas condensate.
“This volume is equivalent to around a third of Oman’s total daily domestic gas supply and will make a significant contribution to ensuring continuing stable supplies from domestic sources,” said BP, which also signed a gas sales agreement with the Omani government.
The Khazzan project, located south of Block 61, represents the first phase in the development of one of the Middle East region’s largest unconventional tight gas accumulations, which has the potential to be a major new source of gas supply for Oman over many decades.
Construction work to develop a total of seven trillion cubic feet (tcf) of gas will begin in 2014, with production expected to start in late 2017.
BP said the amended exploration and production sharing agreement and a gas sales agreement will extend for an initial 30 years as well as provide for the additional appraisal of further gas resources within Block 61.
BP said the Omani government has also that state-owned Oman Oil Company Exploration & Production (OOCEP) will acauire a 40% stake in Block 61.
Accordin to Salim Al-Sibani, OOECP’s CEO, the project will help Oman meet its future energy needs.
Separately, Total said it has signed an exploration and production sharing agreement (PSA) for offshore Block 41 with the Omani government. The French major was awarded the exploration round for the block northwest of Muscat in November 2012.
Subsidiary Total Exploration & Production expects to start exploration work in 2014 on the block covering a 24,000-sq km area in water depths ranging from 30 to more than 3,000 metres.
Arnaud Breuillac, the company’s President for the Middle East, said:
“This acquisition is aligned with Total’s ambitious exploration strategy focused on frontier basins and new plays with strong potential. This entry into the ultra deep offshore waters of Oman bolsters other recent additions to our exploration portfolio.”
Last year, Total Exploration & Production produced the bulk of its 37,000 barrels of oil equivalent per day in Oman in Blocks 6 and 53.