BP plc (BP - Free Report) along with its partner, Oman Oil Company Exploration & Production LLC, has agreed on the development of Ghazeer, the second phase of the massive Khazzan gas field in Oman.
Following the successful commissioning of Khazzan’s first phase of development, BP intends to make the final investment decision (FID) for Ghazeer. Khazzan commenced production ahead of schedule and expenses related to it were below budget. Currently, it is producing at planned capacity of about 1 billion cubic feet of gas per day (bcf/d) and condensate of about 35,000 barrels per day.
Ghazeer, BP’s first project FID of 2018, is projected to come online in 2021. It is intended to provide an additional 0.5 bcf/d of gas and more than 15,000 bpd condensate production. Appraisal drilling on Ghazeer was completed in 2017. Drilling on the first three development wells has commenced. Initial construction at Khazzan to accommodate a third gas train and related infrastructure has already begun.
Cumulatively, the Khazzan and Ghazeer developments are projected to deliver total production of 10.5 trillion cubic feet (tcf) of gas and about 350 million barrels of condensate by the end of concession, projected by 2043.
BP, the operator of Block 61, holds a stake of 60%, while the remaining 40% is held by Oman Oil Company Exploration & Production.
The initial exploration and production sharing agreement (EPSA) for the development of the Khazzan Project for Block 61 was inked in December 2013. In 2016, the company inked an agreement with the Government of the Sultanate of Oman to revise the EPSA for Block 61. This added another 1,150 square kilometer to the south and west of the development, which spans 2,800 square kilometer.
BP’s presence in Oman dates back to 2007. Currently, the company is developing more than 5.5 million barrels per day of oil and gas production throughout the Middle East along with its national oil company partners. Moreover, BP’s expertise will help in sustaining Oman’s energy requirementsfor many decades to come.
BP’s shares have lost 2.9% in the last three months, compared with the industry’s 6% decline.
Zacks Rank & Key Picks
BP carries a Zacks Rank #3 (Hold).
A few better-ranked players in the same sector are Continental Resources, Inc (CLR - Free Report) , Northern Oil and Gas Inc (NOG - Free Report) and SunCoke Energy Inc (SXC - Free Report) . All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Continental Resources is an independent oil and natural gas exploration and production company. It delivered an average positive earnings surprise of 64.9% over the last four quarters.
Northern Oil and Gas, based in Minnetonka, MN, is an independent energy company. The company delivered an average positive earnings surprise of 175% during the same time frame.
SunCoke Energy produces metallurgical coke in the United States. The company delivered an average positive earnings surprise of 130.6% in the last four quarters.
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