BP, Oman to Sign Tight Gas Deal by September

Oman’s Ministry of Oil and BP are likely to sign a deal to harness Oman’s tight gas resources in Block 61’s Khazzan-Makarem field by September.

Shaikh Ali bin Thabit al Battashi, Adviser to the Ministry of Oil and Gas, said that negotiations are at a very advanced stage, Oman Observer reported.

Revised gas price agreements have already been signed with Oman India Fertiliser Company (Omifco) and Jindal Shadeed Iron & Steel Company, with the majority of other users expected to sign up in the coming months.

The higher earnings accruing to the Omani government as a result of the gas price revisions will help support the development of difficult and tight gas fields, the report said.

“Signing with these major industrial gas users gives us the ability to ensure we can proceed with the Khazzan-Makarem development on a fast-track basis. This is a huge gas field. We are expecting to develop about 1-1.2 billion standard cubic feet of gas per calendar day by 2017-18 to cover the wedge we expect from the current gas supply. So BP gas will offset the decline in gas volumes currently being supplied,” Al Battashi said.

According to the official, around 7.6 trillion cubic feet (TCF) of Khazzan-Makarem’s estimated potential of 100-150 TCF of gas in place will be earmarked for exploitation during the field’s initial development.