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Despite the near halving of global oil prices since mid-2014, progress at the $16bn Phase 1 Khazzan tight gas project in central Oman continues unabated, BP president for the Middle East Michael Townshend says.
The British oil major, which holds a 60% operating stake in the project, in February joined a growing list of international oil companies that have slashed their 2015 capex budgets as a result of the current lower oil price environment. The price of Brent has fallen to around $60/B, from a mid-2014 high of $115/B.
Yet, these cuts appear to have had no effect on the company’s plans to develop Phase 1 of the giant Khazzan field on Block 61 – a project the sultanate has long looked to in its efforts to ease an ever-growing domestic gas crunch. Despite overseeing year-on-year increases in its gas output over the past decade (bar 2014, when output fell 1% versus 2013), Oman continues to face a gas shortage as demand growth, driven by the country’s numerous gas-hungry enhanced oil recovery projects, continues to outstrip supply, also having implications for LNG exports (see p10 and MEES, 17 April). (CONTINUED - 774 WORDS)