LNG

Warrego Energy Ltd, the Australian oil and gas explorer with natural gas assets in the onshore Perth Basin, said its board's recommendation of a takeover by a subsidiary of Hancock Prospecting Ltd. was no longer unanimous following a revised proposal from Australia’s Strike Energy amid an intense Australian company bid battle.

BP of the UK and Italian energy company Eni signed a heads of agreement with the Ministry of Oil and Gas of the Sultanate of Oman to work jointly towards a significant new exploration opportunity in the Arabian Peninsula nation where BP’s onshore Khazzan natural gas discovery revitalized LNG production.

BP said that under the accord, the two companies would work with Oman towards the award of a new exploration and production sharing agreement (EPSA) for Block 77 in central Oman.

BP and Eni will now enter discussions with the Ministry to finalise details.

“This would represent a further deepening of BP’s important position in Oman, building on our successful delivery of the major Khazzan project in 2017 and its second phase of development that is currently under construction,” said Bernard Looney, BP chief executive of the upstream division in reference to additional output achieved by Oman LNG from having sufficient domestic gas supplies.

“We look forward to continuing to explore and efficiently develop the country’s resources, working in close partnership with Eni and Oman to underpin our commitment to delivering long-term gas production for Oman,” he added.

The country’s three existing liquefaction Trains at the facilities near the town of Sur have been at full capacity since 2017 after previously suffering from a lack of feed-gas as supplies were diverted to fill domestic gas shortages.

The Omani government allocates Oman LNG supplies from various gas fields and the Khazzan field production has ended all feed-gas concerns for the near future.

The three Omani LNG processing Trains currently produce around 10.4 million tonnes per annum and supply nations such as Japan, South Korea, India and Kuwait.

Block 77, with a total area of almost 3,100 square kilometre, is located in central Oman, 30km east of the BP-operated Block 61, which contains the already-producing Khazzan gas project as well as the Ghazeer project currently under development.

The Khazzan natural gas field began production in 2017, under budget and ahead of schedule. Khazzan now produces around 1 billion cubic feet of gas a day.

The Ghazeer field is expected to add a further 0.5 bcf/d of production and is expected to come on stream in 2021.

BP has had an upstream presence in Oman since 2007 when it signed an exploration and production sharing agreement for Block 61.

Gas sales agreements and approval for the development of the Khazzan project on Block 61 were signed in 2013. In 2016, the EPSA for Block 61 was amended, adding a further 1,000 square kilometres and allowing a second phase of development.

Oct 30 (LNGJ) - BP said natural gas, LNG and liquids contract sales jumped to $5.76 billion in the third quarter compared with $4.10Bln in the same three months a year ago. The UK major’s overall replacement cost profit before interest and tax for the third quarter and nine months was $3.47Bln and $10.16Bln respectively, compared with $1.24Bln and $3.2Bln for the same periods in 2017. “Our focus on safe and reliable operations and delivering our strategy is driving strong earnings and growing cash flow,” said Chief Executive Bon Dudley. “ Operations are running well across BP and we’re bringing new, higher-margin barrels into production faster through efficient project execution,” he added. “We have made very good progress with our acquisition from BHP (US shale assets) and expect to complete the transaction tomorrow (Oct 31). This will transform our position in the US Lower 48 and we expect it to create significant value for BP,” stated Dudley.