Release date: 8 November 2017
Throughout its history, the oil and gas industry has thrived on exploration and new discoveries. But sometimes a discovery is simply too complicated and costly to develop and it can be years before technology catches up.
This is certainly true at Khazzan, which was originally discovered in the late 1990s by Petroleum Development Oman (PDO) – owned by the government, Shell, Total and Partex. With 10.5 trillion cubic feet of recoverable gas reserves, Khazzan was big by anyone’s measure, but it was also buried under almost three miles (five kilometres) of very hard, very old rock and locked in low permeability reservoirs, meaning it was what’s known in the industry as tight gas. The economics at the time were prohibitive.
Nearly a decade later, the Oman government was ready to invite international companies to bid for the Block 61 concession. At the same time, BP had become an industry leader in the extraction of tight gas, particularly in North America. Showcasing this technical experience went a long way to BP winning the Khazzan bid, and a production sharing contract was signed in 2007.
BP quickly got to work, conducting a huge new seismic study – the data from which is still being used to analyse the field today – followed by a three-year extended well test. The results of that test convinced the Omani government to give BP the go-ahead to proceed to full-field development on the promise of first gas by the end of 2017.
“Delivering on that promise was one of our biggest challenges,” says BP Oman president Yousuf Al Ojaili. “We started out with nothing but desert and a strict deadline; I’m pleased to say we’ve done it. The other challenge was the field development. There were a lot of questions in the early days about whether we could really unlock the gas volumes at an economic rate.”
But deliver it they have, thanks to a variety of measures that have reduced the costs of the wells by about 45% and boosted by the success of drilling and hydraulic fracturing techniques.
Located almost 220 miles (350 kilometres) southwest of Muscat, Khazzan was a huge, remote, greenfield project. Today, the facility’s footprint is larger than the whole of the Greater London area. It’s hard to overstate the challenge that faced BP – it literally had to build Khazzan from the ground up.
To do so in less than four years, is extraordinary, says Julian O’Connell, vice president, projects at Khazzan. “By any industry standard that is very fast for a development of this type, let alone one in the middle of the desert with no infrastructure.” As well as drilling wells and constructing the central processing facility, BP built:
And that’s not all…
BP and Oman signed the first exploration agreement in 2007.
The project moved from ‘execute’ to first gas in just 42 months.
At the height of construction, 13‚500 people worked on the Khazzan project…
…with 90 million man-hours logged…
…and 60,000 chapattis made every day to feed the workforce.
BP laid 45 miles (70 kilometres) of tarmac road. By comparison, there were just 19 miles (30 kilometres) of tarmac road in the whole of Oman in 1970.
It is a 6 hour drive from Muscat to Khazzan.
BP also laid 37 miles (60 kilometres) of pipe to supply water to the Khazzan site.
In the space of one year, the Khazzan team went from 1 drilling rig to 10…
…and drilling 3 wells a year to 30.
Each well is approximately 2.7 miles (4.5 kilometres) in length. Typically, horizontal wells then travel another 3,200 feet (1,000 metres) laterally.
In summer, the desert heat can rise above 50˚C (122˚F)
More than 250 miles (400 kilometres) of pipeline will be laid over Khazzan’s lifetime.
Khazzan is now producing and processing gas from its first 60 wells in a field that will make a significant contribution to Oman’s domestic supplies. Under the first phase of development, Khazzan is expected to produce 1 billion cubic feet of gas per day (bcf/d) from 200 wells. A second phase - approved by the government in November 2016 and now under appraisal – would add another 0.5 bcf/d.
Khazzan is important to Oman, providing a vital source of energy for a country with big plans. Oman’s Minister for Oil and Gas, Dr Mohammed Al Ruhmy sums up the significance of the project: “Firstly, it has unlocked one of the largest natural gas deposits in the country – a precious resource that has been challenging to develop for many years.
“Secondly, it delivers more of the gas reserves and production that our country needs to support our energy planning and requirements. And thirdly, it has helped to build skills and capabilities and provide essential experience that Omanis need to develop and prosper. The second phase of Khazzan will build on the work of the first and demonstrates BP’s commitment to invest in a significant project that will deliver long-term value to both Oman and BP.
"I have been fortunate enough to have visited the Khazzan field with BP and Oman Oil Company Exploration and Production and I was struck by the size and scale of the facilities. Within only a few years we have transformed the area from a desert to an impressive operational facility.”