MUSCAT, Nov 12 – Phase 1 of the giant Khazzan gas field development, which was formally inaugurated at the weekend, will make a significant contribution to the socio-economic development of the Sultanate over the long-term, according to a key official of Oman Oil Company, a partner in the multi-billion dollar mega venture.
Isam bin Saud al Zadjali, CEO of Oman Oil Company, said the Khazzan project will also help maximise the value of Oman’s natural resources.
“I am delighted by the fact that the project has contributed to the sustainable development of the nation on many fronts, including human capital development, new technology applications and social responsibility, to name only a few,” Al Zadjali stated.
His Highness Sayyid Haitham bin Tareq al Said, Minister of Heritage and Culture, and Bob Dudley, BP’s Group Chief Executive, officially inaugurated the landmark gas development on November 9, 2017.
Speaking at event, Bob Dudley said: “It is an honour to be here in Oman on this momentous occasion. Although this marks just the beginning of operations for Khazzan, we have already been working towards this for ten years, building close relationships with Oman and our partners. I expect these will continue to grow and deepen.
“Visiting this huge project that we have together built here in just a few years, I can see why it has been described as ‘the city in the sand’. And this city will deliver benefits for Oman and BP for decades to come. With an estimated 10.5 trillion cubic feet of recoverable gas resources in place in Khazzan, this is very much just the start of the journey,” he stated.
The Phase One development started gas production in September 2017, ten years after the signing of BP’s production sharing contract with Oman and almost four years after the development was approved.
Phase One will include a total of 200 wells feeding into a two-train central processing facility. At peak, the Phase One development involved a workforce of around 13,500. Phase One production is expected to plateau at 1 billion cubic feet of gas per day (bcf/d). When the second phase of development of the Khazzan field — known as Ghazeer — is fully on stream, total production is expected rise to 1.5 bcf/d. In total, approximately 300 wells are expected to be drilled over the estimated lifetime of these two phases of development of the Khazzan field.
BP is the Operator of Block 61 and holds a 60-per cent interest, while Oman Oil Company for Exploration and Production (OOCEP) — a wholly owned subsidiary of Oman Oil Company — holds a 40-per cent interest. The production sharing agreement for Block 61, which contains the Khazzan field, was first signed in 2007 and was amended in 2013 and extended in 2016. Appraisal over 2007-2013 confirmed the existence of significant tight gas resources that could be developed through the application of BP’s extensive unconventional gas experience and technology. The first phase of development of the field was sanctioned in December 2013.
The original Block 61 PSA covered an area of 2,800 square kilometres in central Oman, approximately 350km southwest of Muscat. The Block 61 extension agreed in 2016 added a further 1,150 square kilometres to the south and west of the original block and enabled a second phase, Ghazeer.
BP’s specialised experience in accessing tight gas was the key to it being awarded the contract a decade ago to explore for and produce gas in Block 61. To complete Phase 1 of the project, horizontal and vertical wells have been drilled across the field, hundreds of kilometres of pipeline laid, a two-train Central Processing Facility (CPF) built, road, telecoms, water and power infrastructure installed and living accommodation completed. Over the life of the project around 300 wells will be drilled and a third train added to the CPF.
Extracting gas tightly held in the old, hard rocks of Khazzan has also been a major challenge. BP brought in its global experience in advanced seismic, hydraulic fracturing and well design expertise, which has been vital in the work to date. The company conducted the world’s largest onshore seismic survey and precise 3D modelling of the subsurface to understand where the gas is and how it is distributed. It is now undertaking highly accurate horizontal drilling and injecting fluids at pressure to coax the gas out. The expertise gained by Omani engineers will enhance the capability of Oman’s oil and gas sector. Drilling efficiency has increased significantly during the development of the project. The average time to drill and complete a vertical well was reduced by 27 per cent and a record time of 60 days was achieved for completion of one well.
While BP provided advanced seismic, hydraulic fracturing and well design expertise, many local Omani businesses contributed to the Khazzan project. In fact, approximately 38 per cent of the total contract spend to date has been awarded to local oil and gas services companies.