BP Offloads 20% Share of Oman’s Block 61 To PTTEP

The $2.59-billion deal advances BP’s effort to divest $25 billion of its global proceeds by 2025.

Oman's Block 61

Marking another significant step in its divestment program, BP will sell a 20% participating interest in Oman’s 3950 km2 Block 61 in central Oman to Thailand’s national PTT Exploration and Production (PTTEP) for $2.59 billion. BP will remain operator of the block, holding a 40% interest.‎

The sale comprises $2.45 billion payable on completion and $140 million payable contingent on preagreed conditions.‎ After the sale, BP will hold 40% interest in Block 61, while OQ holds 30%, PTTEP ‎20%, and ‎Petronas 10%.‎

Block 61 contains the largest tight gas ‎development in the Middle East.

“Block 61 is a pioneering development that has applied ‎leading techniques and technologies to maximize efficiency and minimize emissions,” said BP CEO Bernard Looney. “We are committed to BP’s business in Oman—this agreement allows us to remain at the ‎heart of this world-class development while also making important progress in our global ‎divestment program.”‎

BP is targeting divestment proceeds of $25 billion by 2025. At year-end 2020, it finalized the $5-billion sale of ‎its petrochemicals business to INEOS.‎

The block’s two phases of development, Khazzan and Ghazeer fields, are targeted at developing 10.5 trillion scf of gas ‎resources; together, they have a capacity of 1.5 billion scf/D of gas and more ‎than 65,000 B/D of condensate. The gas is exported for domestic consumption ‎into Oman’s national gas grid and boost feedstock supply for Oman‎LNG.‎

“We look forward to working closely ‎with PTTEP, our other partners, and the government of Oman on the continued success of ‎Khazzan and Ghazeer, and to explore further opportunities in Block 61,”‎ Vice President of BP Oman Yousuf Al Ojaili said. “We will continue ‎to support critical national energy infrastructure for the sultanate through Block 61, invest ‎significantly in local companies and Omani talent, and deliver an ambitious social investment ‎program.”‎

In 2020, Omanization in BP—the practice of replacing expatriate workers with Omani personnel, according to Omani quotas for various industries—reached approximately 85%; Block 61 spending with Omani-registered companies exceeded $610 million.

Block 61 Timeline

BP established an upstream presence in Oman in 2007 when it signed an E&P-sharing agreement for Block 61.

  • 2007: PSA for Khazzan field was signed.
  • 2007–2013: Appraisal confirmed existence of significant tight gas resources.
  • 2013: Gas sales agreements and approval signed to develop Khazzan project.
  • 2016: EPSA for Block 61 was amended, adding 1000 km2 for the Ghazeer phase of development.
  • 2017: The Khazzan field began gas production, under budget and ahead of schedule.
  • 2018: Ghazeer development was sanctioned.
  • 2018: OQ sold 10% interest in Block 61 to Petronas.
  • October 2020: First gas from Ghazeer was delivered ahead of schedule.