BP begins production at the Khazzan gas field in Oman

BP said it had begun production at the Khazzan gas field in Oman, the sixth and largest of seven new upstream projects that are due to start for the British oil giant this year.

Production at the field follows on from BP’s onshore compression and Juniper projects in Trinidad, West Nile Delta Phase 1 in Egypt, Persephone in Australia and the Quad 204 project West of Shetland.

There remains only the Eni-operated Zohr project in Egypt which is on schedule to start before year end.

These seven projects are expected to make a significant contribution to the 800,000 barrels of oil equivalent per day of production that BP expects to add by 2020, more than offsetting a decline in the base portfolio and so contributing to rising production and – with higher margins that the average of the portfolio – cash flows.

About 300 wells are expected to be drilled over the lifetime of the Khazzan field, BP said, adding that the two planned phases will develop an estimated 10.5 trillion cubic feet of recoverable gas resources.

BP, which has had an upstream presence in Oman since 2007, is lead partner in the project with a 60 per cent interest. Oman Oil Company Exploration & Production holds 40 per cent.

The two companies agreed last year to extend licensing agreements, paving the way for the development of a second phase of the Khazzan tight gas field and increasing expected production by 50 per cent.

In July, the Oman news agency quoted an oil and gas ministry official as saying the Sultanate will start operating a plant to process gas from the Khazzan field in early September.