BP awards $730m drilling contracts for Oman gas project

Khazzan project is vital for Oman whose own gas exports have been eaten away by its voracious appetite for energy
BP awards $730m drilling contracts for Oman gas project
(Getty Images)
By Reuters
Sun 05 Oct 2014 01:23 AM

BP has awarded two drilling contracts worth $730 million for the development of its Oman's Khazzan tight gas project.

It said it has awarded work worth more than $400 million to KCA Deutag for the construction and operation of five land rigs for Khazzan and a $330 million contract to Oman's Abraj Energy Service for the supply of three drilling rigs for the full field development.

The Khazzan project, which aims to extract around one billion cubic feet (bcf) per day of gas from sandstone with low permeability at depths of up to 4,500 metres in central Oman, is a showcase for BP's tight gas extraction technology.

Its success is vital for Oman whose own gas exports have been eaten away by its voracious appetite for energy.

In December BP signed the Khazzan gas deal, which involves a 15-year programme of drilling into the sandstone thousands of metres below the surface to extract gas using hydraulic fracturing technology developed for shale gas and oil in the United States.

BP expects to invest around $9.6 billion over the full field development, in accordance with its 60 percent stake in the $16 billion project. State-owned Oman Oil Company Exploration & Production (OOCEP) will have a 40 percent stake.

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