BP Starts Production from Giant Khazzan Gas Field in Oman

By September 26, 2017OOCEP News

Phase One of tight gas project to deliver 1 billion cubic feet of gas per day to Sultanate of Oman and on track for future expansion to 1.5 billion cubic feet of gas per day.

MUSCAT, Sultanate of Oman – BP along with the Ministry of Oil & Gas of the Sultanate of Oman today announced that production has begun from the massive Khazzan gas field, which is operated in partnership with Oman Oil Company Exploration and Production.

The Khazzan Project was sanctioned in December 2013, after the appraisal period 2007-2013 which confirmed the existence of tight gas reservouer that BP can extract using its innovative technology.

His Excellency Dr. Mohammed bin Hamad Al Rumhy, Minister of Oil and Gas stated: “I am delighted to see BP delivering Phase One of the Khazzan Project on time and on budget. This will result in realizing more gas reserves and more production of gas that our country needs to support our energy planning and requirements”

“Khazzan marks another major project start-up for BP in 2017,” said Bob Dudley, BP chief executive. “It also demonstrates BP’s ability to consistently deliver large projects through our deep technical knowledge and expertise in manging complex oil and gas value chains in close cooperation with host governments and local contractors.”

Including Khazzan, BP expects to start-up seven major projects in 2017 — making it one of the most significant years for commissioning new projects in the company’s history. Together with the projects already brought on line in 2016, these new projects are expected to add 800,000 barrels of oil equivalent per day (mboed) of new production by 2020.

Phase One of the Khazzan development is made up of 200 wells feeding into a two-train central processing facility. Phase One production will plateau at 1 billion cubic feet of gas per day (bcf/d) for domestic consumption. Production will rise to 1.5 bcf/d once the second phase of the Khazzan project is fully up and running. More than 300 wells will be drilled over the estimated lifetime of the Khazzan field.

Eng. Isam bin Saud Al Zadjali, CEO of Oman Oil Company commented: “We are excited to see how this achievement is going to reflect on Oman’s economy. We are indeed harvesting the results of our strategic partnership with BP. While Oman has a vast set of resources, and human capabilities, BP brought its technology to help unlock that potential. This increment of gas supplies will provide feedstock for development of downstream and petrochemical industries.”

The Khazzan tight gas reserves lie at depths of up to five kilometres in narrow bands of extremely hard, dense rock. These complex and challenging conditions required specialized drilling equipment, the precise drilling of both vertical and horizontal wells, and well stimulation to free the gas. Many of the technics were perfected by BP’s U.S. shale gas operations and the technology was successfully applied to the Khazzan project.

Drilling efficiency increased significantly during the project with the average time to drill and complete a vertical well reduced by 27%. A record time of 60 days was achieved for completion of one well.

Local Omani businesses were relied on to provide rigs, well stimulation and drilling support with BP providing advanced seismic, hydraulic fracturing and well design expertise. Approximately 38% from the total contracts spent to date were awarded to local contractors.

Notes to Editors

  • In December 2013, the Government of the Sultanate of Oman and BP signed a gas sales agreement and an amended production sharing agreement for the development of the Khazzan Project in Block 61. The agreements were ratified in February 2014 in a Royal Decree issued by His Majesty Sultan Qaboos bin Said.
  • BP is the Operator of Block 61 and holds a 60% interest. The Oman Oil Company for Exploration & Production holds a 40% interest.
  • In 2016, BP signed an agreement with the Government of the Sultanate of Oman committing to amend the Oman Block 61 exploration and production sharing agreement (EPSA). This has added a further 1,150km2 to the south and west of the original 2,800km2 Block 61 development, allowing a second phase of development known as Ghazeer.
  • BP is one of the largest oil and gas companies in the world and has had an upstream presence in Oman since 2007.
  • With its national oil company partners, BP is currently helping to develop more than 5.5 million barrels per day of oil and gas production throughout the Middle East.
  • For more about BP’s seven major projects in 2017, please visit: bp.com/7in2017

 

Further inquiries

BP London press office: +44 20 7496 4076, bppress@bp.com

Cautionary statement

In order to utilize the ‘safe harbor’ provisions of the United States Private Securities Litigation Reform Act of 1995 (the ‘PSLRA’), BP is providing the following cautionary statement. This press release contains certain forward-looking statements concerning BP’s plans and expectations ……… U.S. investors are urged to consider closely the disclosures in our Form 20-F, SEC File No. 1-06262. This form is available on our website at www.bp.com. You can also obtain this form from the SEC by calling 1-800-SEC-0330 or by logging on to their website at www.sec.gov.

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