(RTTNews) – bp plc (BP.L, BP_UN.TO, BP) announced Monday that production has begun from its Block 61 Phase 2 Ghazeer gas field in Oman, 33 months after the development was approved.

Ghazeer was initially expected to come into production in 2021. The first phase of development of Block 61 – Khazzan – was brought online in September 2017.

Total production capacity from Block 61, comprising both Khazzan and Ghazeer, is expected to rise to 1.5 billion cubic feet of gas a day and more than 65,000 barrels a day of associated condensate. With an estimated 10.5 trillion cubic feet of recoverable gas resources, the block has the capacity to deliver approximately 35% of Oman’s total gas demand.

Mohammed Al Rumhy, Minister of Energy & Minerals of the Sultanate of Oman, stated that the gas from Ghazeer will contribute towards Oman’s 2040 vision in terms of providing additional energy to local industries as well as diversifying the economy.

Bernard Looney, bp chief executive, said, “This project has been delivered with capital discipline four months early, wells are being drilled in record times and, importantly, safety performance has been excellent. It exemplifies what a strong and resilient hydrocarbons business looks like – a core part of our strategy.”

The company noted that as this important first gas milestone is achieved, Omanisation in bp Oman reached over 80%.

Omani-registered companies were also used for over 85% of all project spend.

In London, bp shares are trading at 218.35 pence, down 1.69 percent.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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By Ron Bousso

LONDON, Oct 12 (Reuters)BP BP.L started production at Oman’s giant Ghazeer natural gas field in Oman which is set to underpin the company’s oil and gas output for years even as it shifts to renewables.

The London-based company said in a statement that Ghazeer, the second phase of development of Block 61, started four months ahead of schedule and below its planned budget.

BP is in the midst of the largest overhaul in its history after CEO Bernard Looney set out a path to rapidly shift BP to renewable power and reduce its oil and gas production by 1 million barrels per day by 2030.

But oil and gas is set to help pay for the shift in the coming decade.

“It is absolutely central for BP because it generates the funding allowing us to invest in new businesses and transform the company,” Gordon Birrell, BP head of oil and gas operations, told Reuters.

BP, which wants to sell $25 billion of assets by 2025, is in talks to sell down its stake in Oman, industry sources have told Reuters.

The first phase, Khazzan, was brought online in September 2017. Total production capacity from the block is expected to reach 1.5 billion cubic feet of gas a day and more than 65,000 barrels a day of associated condensate.

BP holds 60% of the Block 61 project, Oman’s national oil and gas company 30% and Malaysia’s Petronas PETRA.UL another 10%.

(Reporting by Ron Bousso, editing by Louise Heavens)

(([email protected]; +44 (0) 2075422161; Reuters Messaging: [email protected]))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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