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bp to sell 20% stake in Oman‎’‎s Block 61 to PTTEP

Release date:
1 February 2021
  • bp agrees to sell interest to PTT Exploration and Production Public Company Limited for $2.6 ‎billion
  • bp will remain operator of Block 61, with 40% interest
  • Agreement marks another significant step in bp’s divestment programme
Oman Block 61, with Ghazeer in the background

bp has agreed to sell a 20% participating interest in Oman’s Block 61 to PTT Exploration and ‎‎Production Public Company Limited (PTTEP) of Thailand for a total consideration of $2.6 billion. ‎Following completion of ‎the sale, bp will remain operator of the block, holding a 40% interest.‎


‎Subject to approval from the Sultanate of Oman and partners, the deal is expected to complete during ‎‎2021. The agreed total consideration of $2.590 billion comprises $2.450 billion payable on completion ‎‎(subject to final adjustments) and $140 million payable contingent on pre-agreed future conditions.‎


Following completion, participating interests in Block 61 will be: bp, 40%; OQ, 30%; PTTEP, ‎‎20%; and ‎PETRONAS, 10%.‎


PTTEP is Thailand’s national petroleum exploration and production company, with interests in ‎‎15 ‎countries, including Oman.

 

“We are committed to bp’s business in Oman – this agreement allows us to remain at the ‎heart of this world-class development while also making important progress in our global ‎divestment programme.”

 

Bernard Looney, chief executive officer, bp

 

Block 61, covering around 3,950km2 in central Oman, contains the largest tight gas ‎development in the Middle East. The block has already had two phases of development – ‎Khazzan, which began production in 2017, followed by Ghazeer in October 2020.

 

These two developments, targeted at developing a total of 10.5 trillion cubic feet of gas ‎resources, have a combined daily production capacity of 1.5 billion cubic feet of gas and more ‎than 65,000 barrels of condensate. Gas from Block 61 is exported for domestic consumption ‎into Oman’s national gas grid, while also boosting availability of feedstock supply for Oman ‎LNG.‎

 

bp chief executive officer Bernard Looney said: “We are pleased to welcome PTTEP to the ‎successful Block 61 partnership. Block 61 is a pioneering development that has applied ‎leading techniques and technologies to maximise efficiency and minimise emissions.

 

‎“We are committed to bp’s business in Oman – this agreement allows us to remain at the ‎heart of this world-class development while also making important progress in our global ‎divestment programme.”‎

 

bp is targeting divestment proceeds of $25 billion by 2025. Most recently, the $5 billion sale of ‎bp’s petrochemicals business to INEOS completed at the end of 2020.‎

 

“We look forward to working closely ‎with PTTEP, our other partners, and the Government of Oman on the continued success of ‎Khazzan and Ghazeer, and to explore further opportunities in Block 61.”‎

 

Yousuf Al Ojaili, vice president, bp Oman  

 

bp has had an upstream presence in Oman since 2007 when the original production sharing ‎agreement (PSA) for Block 61 was signed. Beyond Block 61, bp and Eni signed a PSA for ‎Block 77 in 2019. bp Trading & Shipping also purchases LNG from Oman LNG under a seven-‎year deal that started in 2018.‎

 

bp Oman vice president Yousuf Al Ojaili commented: “We look forward to working closely ‎with PTTEP, our other partners, and the Government of Oman on the continued success of ‎Khazzan and Ghazeer, and to explore further opportunities in Block 61.

 

‎“We remain very much committed to our strategic partnership with Oman. We will continue ‎to support critical national energy infrastructure for the Sultanate through Block 61, invest ‎significantly in local companies and Omani talent, and deliver an ambitious social investment ‎programme.”‎

 

In 2020, Omanisation in bp Oman reached around 85% and Block 61 spend with Omani-‎registered companies exceeded $610 million.

Notes to editors


Block 61 timeline

 

  • 2007: PSA for Block 61 Khazzan field signed
  • 2007-2013: appraisal confirmed existence of significant tight gas resources
  • 2013: Khazzan, first phase of field development, sanctioned
  • 2016: bp signed an amendment to the Block 61 PSA agreement adding additional area to ‎the south and west of original Block 61 development, allowing a second phase of ‎development, the Ghazeer field
  • 2017: first gas from Block 61 Phase 1, Khazzan, delivered ahead of schedule
  • 2018: development of Block 61 Phase 2, Ghazeer, sanctioned
  • 2018: OQ sold 10% interest in Block 61 to Petronas
  • Oct 2020: first gas from Ghazeer delivered ahead of schedule.

Further information

Contact

 

  • bp Oman press office: +968 7927 0628 (Arabic); +968 9786 0638 (English)‎

Cautionary statement

 

In order to utilize the 'safe harbor' provisions of the United States Private Securities Litigation Reform Act ‎of 1995 (the 'PSLRA'), BP is providing the following cautionary statement. This press release contains ‎certain forward-looking statements – that is, statements related to future, not past events and ‎circumstances – which may relate to one or more of the financial conditions, results of operations and ‎businesses of BP and certain of the plans and objectives of BP with respect to these items. These ‎statements are generally, but not always, identified by the use of words such as 'will', 'expects', 'is ‎expected to', 'aims', 'should', 'may', 'objective', 'is likely to', 'intends', 'believes', 'anticipates', 'plans', ‎‎'we see' or similar expressions. In particular, among other statements, statements relating to BP’s ‎divestment programme and plans including expectations with respect to the completion of transactions ‎and the timing of receipt of divestment proceeds. By their nature, forward-looking statements involve risk ‎and uncertainty because they relate to events and depend on circumstances that will or may occur in the ‎future and are outside the control of BP. Actual results may differ from those expressed in such ‎statements, depending on a variety of factors including the risk factors set forth in our most recent Annual ‎Report and Form 20-F under "Risk factors" and in any of our more recent public reports.‎


This document contains references to non-proved resources and production outlooks based on non-‎proved resources that the SEC's rules prohibit us from including in our filings with the SEC. U.S. investors ‎are urged to consider closely the disclosures in our Form 20-F, SEC File No. 1-06262.‎


Our most recent Annual Report and Form 20-F and other period filings are available on our website at ‎www.bp.com, or can be obtained from the SEC by calling 1-800-SEC-0330 or on its website at ‎www.sec.gov.