BP, Oman Oil Company Sign Amended Licensing Agreement
Zacks Investment Research | Nov 09, 2016 08:47PM ET
BP plc (LON:BP) (NYSE:BP) and Oman Oil Company Exploration & Production inked an agreement with the Government of the Sultanate of Oman to modify the Oman Block 61 exploration and production sharing agreement (“EPSA”) pertaining to extension of the license area. This is likely to aid further development of the massive Khazzan tight gas field.
Per the modified EPSA, more than 1000 square kilometers will be added to the south and west of the original 2,700 square kilometers of Block 61 after the aforesaid extension. It would also facilitate the second phase of development as well as help to retrieve additional gas in the area earlier recognized by drilling activity within the original block. Development of this additional resource is subject to final approval of the Government of Oman and of BP, both of which are expected in 2017.
BP, the operator of Block 61, has an interest of 60%. Oman Oil Company Exploration & Production holds the remaining 40%.
The Khazzan reservoir in Block 61, which is considered to be one of the largest unconventional tight gas accumulations in the Middle East, are expected to be a key new source of gas supply for Oman over many decades.
Production from Khazzan will support the steady and long-term domestic supplies of gas for Oman. In fact, output from these reservoirs will account for about 40% of the country’s current total domestic gas production.
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