BP and Oman signed an extended exploration and production sharing licensing agreement for the second phase of the Khazzan gas field project, BP announced on Tuesday.
According to the announcement, the Oman Block 61 exploration and production sharing agreement (EPSA) will extend the license area, paving the way for further development of the giant Khazzan tight gas field.
Under the amended EPSA, the extension adds more than 1,000 square kilometers to the south and west of the original 2,700 square kilometers of Block 61.
"The extension will allow a second phase of development, accessing additional gas in the area already identified 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 expected in 2017," the statement read.
BP is the operator of Block 61 with a 60 percent interest and Oman Oil Company Exploration & Production holds the other 40 percent.
BP recently completed over 80 percent of the Khazzan project and is on track to deliver first gas near the end of 2017, according to the statement.
The Khazzan reservoirs in Block 61 represent one of the Middle East’s largest unconventional tight gas accumulations and are expected to be a major new source of gas supply for Oman over many decades.
Production from Khazzan will offer long-term domestic supplies of gas for Oman, and is expected to represent around 40 percent of the country’s current total domestic gas production.
Phase one of the project, sanctioned in December 2013, remains on schedule to deliver first gas in late 2017. Subject to final approval, the Khazzan Phase 2 project is expected to come on stream around 2020.
Taken together, the two phases are expected to produce 1.5 billion cubic feet (bcf/d) of gas daily through development of 10.5 trillion cubic feet of recoverable gas resources.
By Gulsen Cagatay