The Government of Oman has signed an agreement with Oman's national oil company Oman Oil and BP amending the exploration and production sharing agreement (EPSA) for the Oman Block 61 to extend the license area, paving the way for further development of the giant Khazzan tight gas field. The extension agreement will add 1,000 km² to the south and west of the 2,700 km² Block 1; the development of the additional resources will require final approval of the government of Oman and BP (expected in 2017.
BP is the operator of Block 61 with a 60% stake, in partnership with Oman Oil Company Exploration & Production (40%). The first phase of the Khazzan project, sanctioned in December 2013, has estimated recoverable gas resources of 7 Tcf (197 bcm). It is more than 80% complete and remains on schedule to deliver first gas in late 2017. Gas production could rapidly ramp up to 1 bcf/d (28 mcm/d or 10.3 bcm/year).
Subject to final approval, Khazzan Phase 2 project is expected to come on stream around 2020. It will add 500 mcf/d of gas (14 mcm/d or 5.15 bcm/year). The combined plateau production from Phases 1 and 2 is then expected to total approximately 1.5 bcf/d (42 mcm/d or 15.5 bcm/year), equivalent to around 40% of Oman’s current total domestic gas production.