Oman sees BP tight gas deal in weeks, finds more gas
Muscat says 2012 average daily oil output up at 918,000 bpd
MUSCAT, March 3, (RTRS): Oman hopes to reach agreement in the next few weeks on the price BP would get paid for gas produced from the key Khazzan tight gas project, its oil minister said on Sunday.
BP has long been haggling with Muscat over the price for any gas produced from the project, which Oman needs to maintain gas exports and meet rising demand at home. “Both the government and B P have disagreements, including gas pricing, but I am confident that we will reach an agreement in the coming weeks for this project to go forward,” Mohammad bin Hamad al-Rumhy said.
Omani gas production has risen sharply over the last decade and the country remains a net gas exporter. But rampant domestic demand means it must tap more costly gas deposits if it is to maintain exports of liquefied natural gas (LNG) in coming years.
In a rare Middle Eastern move to slash fossil fuel subsidies and encourage investment, Oman plans to double gas prices for industry from around $1.5 per million British thermal units (mmbtu) in 2012 to $3/mmbtu 2015.
According to industry estimates, total upstream costs for conventional gas pro- duction from reservoirs are around $3/mmbtu, but the cost of trickier projects like Khazzan, where gas is trapped between rocks deep underground, are likely to be higher.
Meanwhile, Oman’s oil production including condensates rose by 4 percent in 2012 to an average of 918,000 barrels per day (bpd) thanks largely to gains from enhanced oil recovery projects, an oil and gas ministry official said on Sunday.
The increase was due to new discoveries in three different oil fields, Nasser Al Jashmi, the undersecretary of the ministry of oil and gas, said.