BP and Oman Oil Company Exploration & Production have signed extended licensing agreement for further development of the Khazzan tight gas field located in Block 61 in Oman.

The field, which is estimated to cost $16bn, expected to produce 1.5 billion cubic feet of gas per day through development of 10.5 trillion cubic feet of recoverable gas resources. It is being developed in two phases.

The deal signed with the Oman government amends the Oman Block 61 exploration and production sharing agreement (EPSA) to extend the license area which would lead to the second development phase of the field.

The license area extension will add more than 1000km2 to the south and west of the original 2,700km2 of Block 61.

BP Group CEO Bob Dudley said: “This expansion will build on our work on the first phase, working closely with our Omani partners and demonstrates our commitment to invest in a significant project that will deliver long-term value to both Oman and BP.”

BP operates the Block 61 with 60% stake while Oman Oil Company Exploration & Production owns the remaining 40% interest.

Scheduled to commence production in 2017, the Khazzan reservoirs in Block 61 is one of the largest unconventional tight gas accumulations in the Middle East.

The second phase of the Khazzan Phase 2 project, which is subject to final approval, is expected to commence production around 2020.

Oman Oil and Gas Minister Dr Mohammed Al Rumhy said: “BP recently reached over 80% progression on the Khazzan project completion and on track to deliver first gas near the end of 2017, and I am delighted to see BP taking additional acreage that will result in realizing more gas reserves and more production of gas that our country needs to support our energy planning and requirements.”

Image: The Khazzan gas field in Oman. Photo: courtesy of BP p.l.c.