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BP to sell Omani gas block to Thailand’s company for $2.6bn

Christian Fernsby |
BP will sell a stake in an Omani gas block to Thailand’s national energy firm for $2.6bn, part of a push to divest billions of dollars of assets and focus more on renewable energy.

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Topics: OMANI    THAILAND   

PTT Exploration and Production Public Co Ltd has agreed to pay the sum for 20% of Block 61, according to statements from both companies.

The deal should help BP deliver on its goal of selling $25bn of assets by 2025, easing its debt burden after the coronavirus pandemic hammered demand for energy. Like other oil majors, the company has also pledged to eliminate most of its greenhouse gas emissions over the coming decades.

Block 61 has been developed in two phases: Khazzan, which began production in 2017, and Ghazeer, which started operating in October.

The block can meet around 35% of Oman’s gas demand, BP said.

The concession area contains the largest tight-gas development in the Middle East, the company said. Khazzan and Ghazeer rely on hydraulic fracturing to boost output, the method that kicked off the US shale boom but is rarely used elsewhere.

Gas produced at the block, which spans 3,950 square kilometres in central Oman, is piped to the grid to meet the country’s domestic needs and supply its liquefaction plant.

BP’s trading arm buys around 10% of the gas produced at Khazzan-Ghazeer in liquid form, under a seven-year supply agreement with Oman LNG that began in 2018.

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