Oil giant BP starts production at $16bn Oman gas field

BP, together with the Ministry of Oil & Gas of Oman, has announced that production has begun from the giant $16 billion Khazzan gas field.

The field, which is operated by BP in partnership with Oman Oil Company Exploration and Production, has tight gas reserves that lie at depths of up to five kilometres in narrow bands of extremely hard, dense rock.

These complex and challenging conditions require specialised drilling equipment, the precise drilling of both vertical and horizontal wells, and well stimulation to free the gas, BP said in a statement.

Dr Mohammed Al Rumhy, Minister of Oil and Gas of Oman, said: “I am delighted to see BP delivering Phase One of the Khazzan Project within time and budget. This will result in realising more gas reserves and more production of gas that our country needs to support our energy planning and requirements.”  

Bob Dudley, BP group chief executive, added: “The start of production from Khazzan, BP’s sixth and largest major project start-up so far this year, is an important milestone in our strategic partnership with Oman. With further development already planned, this giant field has the potential to produce gas for Oman for decades to come.”

BP said it expects to start-up seven upstream major projects in 2017 - making it one of the most important years for commissioning new projects in BP’s history.

“Khazzan further demonstrates BP’s ability to consistently deliver large, complex projects on schedule and within budget while applying the industry-leading skills and technology we’ve developed globally,” Dudley said. “In this case, tight gas techniques we perfected in the US have been brought to Oman and we are very pleased with the results.”

The production sharing agreement for Block 61, which contains the Khazzan field, was first signed in 2007 and was amended in 2013 and extended in 2016.

Phase one of the Khazzan development is made up of 200 wells feeding into a two-train central processing facility. Phase One production is expected to plateau at 1 billion cubic feet of gas per day (bcf/d).

Once the second phase of the Khazzan is fully up and running production is expected rise to 1.5 bcf/d. In total, approximately 300 wells are expected to be drilled over the estimated lifetime of the Khazzan field. Phases one and two will together develop an estimated 10.5 trillion cubic feet of recoverable gas resources.

BP is the operator of Block 61 and holds a 60 percent interest. The Oman Oil Company for Exploration & Production holds a 40 percent interest.

With its national oil company partners, BP is currently helping to develop more than 5.5 million barrels per day of oil and gas production throughout the Middle East.