BP announces investment of $24bn for developing Oman’s gas fields

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Safa oilfield is one of the biggest oilfield and has major oil deposits in the Sultanate of Oman. Photo – ofwbisdak.com

British Petroleum (BP) will be investing $24 billion to develop gas fields in north-central Oman, according to the Ministry of Oil and Gas.

The amount is for the first phase of a development program for 61 tight gas fields, and will be spread out over a 25 year concession period. Eventually, the goal is to produce one billion standard cubic feet of natural gas per day, or 6.7 trillion cubic feet.

Sheikh Ali bin Thabit Al Battashi, an advisor at the Ministry of Oil and Gas, said that the first gas delivery should be by 2017. He added that initially the company will start with a lower production, which will eventually reach 1 billion cubic feet by 2019.

“The initial upfront investment will be $24 billion,” Sheikh Ali bin Thabit Al Battashi, Adviser to the Ministry of Oil and Gas, on the sidelines of a signing ceremony between the Ministry of Oil and Gas and Sohar International Urea and Chemical Industries.

“If everything goes well, BP’s gas exploration will help Oman to achieve self-sufficiency in clean energy,” the government official added.

The second phase in development should produce an additional one billion cubic feet of gas. Al Battashi mentioned, “The upfront investment of $24 billion will cover most of the investments required for phase II development program as well because the second phase will be for drilling of wells. Facilities like a central gas processing plant will come up in the first phase itself.”

“That will be the driving force for the development of gas-rich Khazzan and Makarem fields. The work on a full-scale commercial development of the gas fields will start in the third quarter of next year,” he said.

According to Zaid Khamis al Siyabi, the director general of exploration and production for the oil and gas ministry, ten test wells are currently being prepared for fracking. “BP is drilling a 12th well and one more is to be drilled soon. A few wells have been hooked up through early production facilities and BP is trying to assess the productivity of the wells. They use the information to update the model, which will be used to predict the overall production for the entire field,” he explained.

While the initial investment is made by BP, all gas will be sold to the Omani government, which said it would invest approximately $100 billion over the next 10 years for oil and gas development.

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