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.
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.