BP has agreed to sell a 20% participating interest in Oman’s Block 61 to PTT Exploration and Production Public Company Limited (PTTEP) of Thailand for a total consideration of $2.6 billion. Following completion of the sale, BP will remain operator of the block, holding a 40% interest.
Subject to approval from the Sultanate of Oman and partners, the deal is expected to complete during 2021. The agreed total consideration of $2.590 billion comprises $2.450 billion payable on completion (subject to final adjustments) and $140 million payable contingent on pre-agreed future conditions.
Following completion, participating interests in Block 61 will be: BP, 40%; OQ, 30%; PTTEP, 20%; and Petronas, 10%.
Block 61, covering around 3,950km2 in central Oman, contains the largest tight gas development in the Middle East. The block has already had two phases of development – Khazzan, which began production in 2017, followed by Ghazeer in October 2020.
These two developments, targeted at developing a total of 10.5 Tcf of gas resources, have a combined daily production capacity of 1.5 Bcf of gas and more than 65,000 barrels of condensate. Gas from Block 61 is exported for domestic consumption into Oman’s national gas grid, while also boosting availability of feedstock supply for Oman LNG.
“We are pleased to welcome PTTEP to the successful Block 61 partnership. Block 61 is a pioneering development that has applied leading techniques and technologies to maximize efficiency and minimize emissions,” BP CEO Bernard Looney said. “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. Most recently, the $5 billion sale of its petrochemicals business to INEOS completed at the end of 2020.
“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,” said BP Oman VP Yousuf Al Ojaili. “We remain very much committed to our strategic partnership with Oman. 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.”