1. Home
  2. News and insights
  3. Press releases
  4. BP Oman awards two major drilling contracts

BP Oman awards two major drilling contracts

Release date: 1 October 2014

Muscat, Sultanate of Oman: BP Oman today announced the award of two long term drilling contracts for the Khazzan project in Block 61.

 

KCA Deutag has been awarded more than $400 million contracts for the construction and operation of five new build land rigs for Khazzan. The rigs are being assembled in Nizwa to help maximise employment opportunities in Oman.

 

According to the second agreement, Oman’s Abraj Energy Service has been awarded more than $330 million contracts to supply three drilling rigs for the full field development of the Khazzan Project.

 

“We are pleased to announce these contracts which continue to progress our development of the gas resources at Block 61. Abraj Energy Service and KCA Deutag will play important roles in the massive drilling programme ahead. The selection of Abraj Energy Services demonstrates once again BP’s commitment to In Country Value,” said BP Oman General Manager Dave Campbell.

 

Khalid Al Kindi, Deputy General Manager for BP Oman, stated, “Building local content into our supply chain is a key focus area in BP’s procurement strategy. BP is committed to hiring and developing talented Omanis. We are also implementing a significant multi-million dollar long term social investment strategy to support education and enterprise development in Oman. All these are part of our commitment to deliver BP’s In-Country Value Plan (ICV)”

 

Since the approval of the Khazzan Project development, BP has been actively awarding contracts to ensure that the project meets its deadlines. In addition to the announced contracts awarding, several contracts with a value around $90 million have been awarded to local Omani companies for civil works, including well pads and in-field roads. More recently, BP awarded contracts with a value of around $16 million to several Omani companies to supply carbon steel pipes and to manufacture, supply and install a water pipeline. The water pipeline will be manufactured in Sohar.

 

Sanctioned in December 2013, the Khazzan Project represents the first phase in the development of one of the Middle East region’s largest unconventional tight gas plays. Khazzan has the potential to be a major new source of gas supply for Oman for many decades.

Further information

 

Contacts

 

Thuraya al Taei, Oman: + 968 24684151, Thuraya.Altaei@uk.bp.com

Notes to editors

 

About BP in Oman

  • BP is one of the largest oil and gas companies in the world and has had an upstream presence in Oman since 2007.
  • In December 2013, the Government of the Sultanate of Oman and BP signed a gas sales agreement and an amended production sharing agreement for the development of the Khazzan Project in Block 61. The agreements were ratified in February 2014 in a Royal Decree issued by His Majesty Sultan Qaboos Bin Said.
  • BP is the Operator of Block 61 and holds a 60% interest. The Oman Oil Company for Exploration and Production holds a 40% interest.
  • The full field development of the Khazzan Project will involve a drilling programme of around 300 wells over 15 years to deliver plateau production of one billion cubic feet (28.3 million cubic metres) of gas per day. This volume is equivalent to an increase of around a third of Oman’s total daily domestic gas supply.
  • Construction work for the Khazzan Project, located in the South of Block 61, has commenced and first gas is expected in late 2017.