BP and Oman’s Ministry of Oil and Gas are one step closer to beginning work on the $15bn development of the Khazzan-Makarem tight gas fields on Block 61 after reaching an agreement over the terms of the project. This comes as a boost to the sultanate which, despite overseeing a significant increase in its gas output over the past 10 years, is facing a gas feedstock shortage. Long-running negotiations between the two sides were deadlocked for over three years over a range of issues including the price BP is to receive for gas production, output volumes, the share of condensate output BP will get to market, and the total length of its production deal.

“We have reached an agreement with the Ministry on a commercial framework for Khazzan,” BP Oman general manager Daniel Blanchard tells MEES. However, price – the main sticking point in recent discussions – has yet to be finalized; the deal includes only a reference to a gas price to be used as a basis for future negotiations. Speaking in March, the BP Oman head insisted the gap between Muscat and BP’s price ideas was “not substantial.” (CONTINUED - 638 WORDS)