By The Nation
Phongsthorn Thavisin, chief executive officer of PTTEP, said the subsidiary PTTEP MENA has signed a sale and purchase agreement with BP Exploration for a 20 per cent participating interest in Oman’s Block 61 worth US$2.45 billion, subject to government approval within this year. The value excludes potential contingent payments which are capped at a maximum amount of $140 million, and subject to certain milestones stipulated under the sales and purchase agreement. The acquisition will be funded from cash available from PTTEP’s balance sheet.
Block 61 is a producing onshore gas field with enormous resources and significant importance to Oman’s natural gas market. It has the capacity to deliver approximately 35 per cent of total gas output in Oman. The investment will have an immediate effect on increasing PTTEP’s petroleum reserves and sales volumes.
“Since 2019, PTTEP has invested in key assets in Oman including PDO [Block 6], the largest onshore oil field in Oman, and Oman LNG, the only LNG gas liquefaction complex in the country. The investment in Block 61 is aligned with PTTEP’s direction of growth, focusing on highly prolific areas, and supports our strategy towards gas value chain investments as gas produced from the block will boost the availability of gas supply for Oman LNG. This acquisition will further strengthen PTTEP’s foothold in Oman in the long run and pave the way for future investments in the Middle East,” Phongsthorn said.
Covering around 3,950 square kilometres in central Oman, Block 61 is comprised of two phases, Khazzan gas development which began production in 2017, followed by Ghazeer in October 2020 with a combined daily production capacity of approximately 1,500 million cubic feet per day for gas and more than 65,000 barrels per day for condensate. The block is targeted at developing total gas resources of 10.5 trillion cubic feet.
After the acquisition is completed, BP will hold a 40 per cent participating interest, while other partners including Omani national oil company, PTTEP MENA and PC Oman Ventures, a subsidiary of PETRONAS, will hold 30, 20 and 10 per cent participating interests, respectively.