Muscat: Oman and BP are optimistic about putting a seal to an agreement on gas price that the British oil giants can sell from the Khazzan-Makarem tight gas project at Block 61.
Oman’s Oil and Gas Minister Mohammad Bin Hamad Al Rumhi told media on Sunday that the two parties could agree on pricing in weeks. “I am confident that we will reach an agreement in the coming weeks for this project to go forward,” he said in reply to a question on the project.
BP has been continuing appraisal testing drilling while the negotiations are on to decide on the cost of the project and selling price of gas.
“We are in the middle of negotiations, we are making progress, This will be a good project for us and the government,” Daniel Nlanchard. General Manager BP Oman, told a few reporters on the sidelines of the media briefing held at the Oil and Gas Ministry on Sunday.
He added that these kinds of negotiations do take time to get a right deal for both the parties.
When asked if there was a substantial gap on pricing between the government and BP, he smiled and said: “I would only say there’s a gap.”
He agreed that primarily the costing of the project was delaying the agreement for the commercial development of a natural gas project. “We are going to review our stand on that issue,” he said. When Gulf News asked if BP could climb down on the pricing, he smiled and replied: “Possible.”
“We are comfortable with the technicality of the project and we know there’s gas,” he replied.
The reserves of natural gas in Central Oman were discovered in the 1990s but gas is trapped in this tight field to nearly 5,000-metre depth.
In 2007, BP signed a production-sharing contract (PSC) with Oman for the Block 61 and the Khazzan-Makarem gas fields representing 2,800 sq. kilometres. With this PSC, BP holds 100 per cent of the working interests in the Block 61.
