Page 6 - AsianOil Week 05 2021

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PTTEP buys stake in major

Oman gas project from BP

BP has agreed to sell a 20% stake in Oman’s biggest gas project to PTTEP as it seeks to reduce
its debt while also diminishing its exposure to hydrocarbons as part of its IOC to IEC strategy

COMMENTARY BP this week announced that it will sell a 20% proceed with Ghazeer the following year, tar-
share of its majority stake in Oman’s Block 61 geting additional reserves of 99bn cubic metres.
concession to Thailand’s state upstream opera- The two phases are expected to cost a combined
WHAT: tor PTT Exploration & Production (PTTEP) for $16bn.
BP will sell a 20% stake $2.6bn. The acreage is home to the major Khaz- The company’s CEO and former head
in Oman’s Block 61 to zan and Ghazeer gas development phases. of upstream, Bernard Looney, said on his
Thailand’s PTTEP for BP Oman operates Block 61 and owns a 60% LinkedIn profile that “the sense of achieve-
$2.6bn. stake, with local state-owned firm OQ holding ment [is] immense”.
30% and Malaysia’s Petronas with 10%. BP is “The Khazzan gas development in Oman’s
WHY: understood to have been courting Asian firms Block 61 is a tremendous feat of engineering.
The asset is home to the since mid-2020 regarding a potential farm-down And the gas is up to 5 km below the surface in
Khazzan and Ghazeer of its holding. narrow bands of hardened, dense rock.”
development phases, The announcement is a meaningful stride Turning to the company’s recent strategic
which will produce 1.5 for BP to achieve its goal of divesting $25bn shift, Looney said: “When we introduced our
bcf of gas. worth of assets by 2025 as the company seeks plans to reinvent bp, we were clear that to deliver
to ease its debt burden while also making a them we have to perform as we transform. There
WHAT NEXT: highly public move towards renewables and are few better examples of how we are doing just
The move is part of a low-carbon energy. that than Ghazeer.”
$25bn divestment drive In 2016, BP and Oman Oil Company Explo-
by BP, which is seeking to Block 61 ration & Production (OOCEP) signed a revised
cut its debt burden. Ghazeer, the second phase of Block 61’s devel- petroleum agreement with the Ministry of Oil
opment, was launched in October, four months and Gas to expand the concession area in Block
ahead of schedule. Output has since ramped up 61 for the Khazzan project to ensure its develop-
to 0.5bn cubic feet (14.2mn cubic metres) per ment through well-controlled quotas.
day of gas in addition to the 1 bcf (28.3 mcm) per This expansion extended the concession
day produced by the first phase project, Khaz- area of Block 61 south and west by around 1,000
zan. A further 65,000 barrels per day (bpd) of square km, to be added to the project’s existing
condensate will also be produced. area of roughly 2,700 square km. The expan-
BP commissioned Khazzan in late 2017 and sion enabled BP to begin work on Ghazeer
took the final investment decision (FID) to and included additional resources of gas in the

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