British oil giant BP has agreed to sell a 20% participating interest in Oman’s Block 61 to PTT Exploration and Production Public Company Limited (PTTEP) of Thailand for $2.6 billion, the company announced on Monday.
In BP's statement, it said following sale completion, the company will remain the operator of the block, holding a 40% interest. Oman’s state oil company OQ and Malaysian oil and gas company Petronas are other shareholders.
PTTEP is Thailand’s national petroleum exploration and production company, with interests in 15 countries, including Oman.
Subject to approval from Oman and BP’s partners, the deal is due for completion in 2021.
Block 61, covering around 3,950 square kilometers in central Oman, contains the largest tight gas development in the Middle East. The block has already had two phases of development – Khazzan, which began production in 2017, followed by Ghazeer in October 2020.
These two developments, targeted at developing a total of 10.5 trillion cubic feet of gas resources, have a combined daily production capacity of 1.5 billion cubic feet of gas and more than 65,000 barrels of condensate.
Gas from Block 61 is exported for domestic consumption into Oman’s national gas grid, while also boosting feedstock supply for Oman LNG.
“We are pleased to welcome PTTEP to the successful Block 61 partnership. Block 61 is a pioneering development that has applied leading techniques and technologies to maximize efficiency and minimize emissions,” BP Chief Executive Officer Bernard Looney was quoted as saying in the statement.
Looney said the agreement would help BP advance in its global divestment plan of $25 billion in proceeds by 2025.
Most recently, at the end of 2020, the $5 billion sale of the company's petrochemicals business to the multinational British chemical company INEOS was completed.
BP has had an upstream presence in Oman since 2007 when the original production sharing agreement (PSA) for Block 61 was signed. Beyond Block 61, BP and Italian oil firm Eni signed a PSA for Block 77 in 2019.
BP also purchases LNG from Oman LNG under a seven-year deal that started in 2018.
“We remain very much committed to our strategic partnership with Oman. We will continue to support critical national energy infrastructure for the Sultanate through Block 61, invest significantly in local companies and Omani talent, and deliver an ambitious social investment program,” BP Oman Vice President Yousuf Al Ojaili said.
By Sibel Morrow