BP to invest USD 20 Billion for Omani tight gas

(MENAFN) British Petroleum (BP) plans to produce substantial tight gas in Oman, with an investment of USD20 billion, reported The National.The company has spent USD700 million to evaluate the Sultanate’s Khazzan and Makarem gas fields, and found out that production is possible.

Annual gas output, which could begin in 2016, is expected to reach at least 1.2 billion cubic feet over a period of ten years.

On the other hand, in 2011, BP’s general manager for exploration in Oman, Jonathan Evans, stated that operation work is expected to create many jobs, stressing that unemployment was one of the main factors behind the Arab Spring that swept many countries in the region, including Oman.

It is worth noting that the Sultanate of Oman needs to boost its gas supply to meet the growing electricity needs of its population and industry.

At a cost of up to $20bn, BP would be able to produce at least 1.2 billion cubic feet a day over a 10-year period, a significant boost to Oman’s gas supplies. Production could start as early as 2016. This contrasts with Algeria, where Exxon, Shell and Italy’s Eni can hope for production of shale gas by about 2025, according to analysts. Like tight gas, shale gas is trapped in rock formations deep under the Earth’s surface, and releasing the hydrocarbon necessitates complex drilling procedures and the fracturing of the rock.

Like most of its GCC neighbours, Oman urgently needs to expand its gas supply to cater for the rising electricity requirements of its population and industry.

Last year, the oil and gas ministry said the government had frozen new industrial projects until the energy supply had been guaranteed.

There is political urgency to get these projects off the ground.

The Arab Spring has made it clear that unemployment poses a threat to governments, and creating jobs has moved to the top of the agenda in Oman and throughout the Arabian Gulf.

“The big agenda right now is around job creation,” said Jonathan Evans, the BP general manager for exploration in Oman, when announcing the commercial viability of the gasfields last year.