BP starts £12bn Khazzan gas production

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British oil major BP has started production at its £12bn gas project in Oman today, involving the biggest use of US-style fracking technology till now in the Middle East. The project is operated by the UK giant in partnership with Oman Oil Company Exploration and Production (OOCEP).

According to the Financial Times, the Khazzan field in Oman has “tight” rocks which require horizontal drilling and hydraulic fracturing to release trapped gas from below the surface.

The oil major is employing techniques developed in the US to open the field in an attempt to show how the American-led “unconventional” oil and gas revolution is slowly spreading to hard-to-reach resources globally. 

The area is currently made up of 200 wells and is expected to produce 1bn cubic feet of gas per day. Phase two of the project will involve BP drilling an additional 100 wells, after which daily volumes could rise to 1.5bn cubic feet of gas per day.

Confirming the use of tight-gas techniques perfected in the US, Bob Dudley, the BP group chief executive, said: “…With further development already planned, this giant field has the potential to produce gas for Oman for decades to come.

“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.” 

Khazzan is the largest of six new oil and gas fields brought by BP so far as part of accelerating efforts to replenish its production base after years of retrenchment since the 2010 oil spill. BP will be operating the project with 60 per cent holding stake, while the Oman Oil Company for Exploration and Production holds the remaining 40 per cent.

Shares in BP rose 0.7 per cent after the announcement.

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