Momentum at Oman’s KhazzanJuly 31, 2018
Yousuf Al Ojaili, president of BP Oman, talks to TOGY about work on the Khazzan gasfield, what the company is doing to promote local know-how and the importance of green projects to the firm’s portfolio. BP Oman is the operator of Block 61, believed to be one of the largest accumulations of tight gas in the Middle East.
• On Khazzan’s importance: “Out of the seven projects BP commissioned in 2017, Khazzan was the largest in terms of production volume. It is very important to BP, and it stands as a top priority for even the BP executive team. They always monitor the project’s performance and take personal care in making sure it goes very well and that BP Oman gets everything it needs to make the operation a big success.”
• On BP’s low-carbon strategy: “In the past we have focused on our upstream business. We were spending a lot of time making sure we commissioned and completed projects safely, below budget and ahead of time. Now, we have started to look at integrating different BP businesses in Oman. We started a strategy that consists of targeting low-carbon growth and low-carbon projects.”
Click here to read more
What key milestones has BP reached over the last year?
We started production in September 2017 from the first phase of the Khazzan project. So far the operation has been running safely and efficiently. We reached the nameplate capacity of the plant, and now we are simply producing our nomination from the government. That was the first key milestone of the operation.
We are producing circa 950 mcf [26.9 mcm] [as of April 2018] per day of gas and over 30,000 boepd of condensate, the latter of which is on target with our estimation. It is a collective team effort to run the operation well overall.
The decline rate at Khazzan is in line with our estimate and we have not faced any setbacks. Oman needs gas and clean energy to further build its economy. The Mabrouk discovery complements the gas supply of this country. I am glad to see not only BP but other operators having success for the good of Oman.
The other milestone we reached this year is that we took the FID [final investment decision] of phase two, which involves the development of the Ghazeer area. Civil construction has started. The contractor is onsite conducting the initial work and the preparation for upcoming facilities.
What was the most significant operational hurdle on the Khazzan field?
Out of the seven projects BP commissioned in 2017, Khazzan was the largest in terms of production volume. It is very important to BP, and it stands as a top priority for even the BP executive team. They always monitor the project’s performance and take personal care in making sure it goes very well and that BP Oman gets everything it needs to make the operation a big success.
The most important challenge was unlocking the gas volumes from some of the hardest and oldest rocks in the world. This field was discovered in the early 1990s. The challenge was always to unlock the volumes commercially as the gas itself lies at depths of up to five kilometres. As a global organisation, BP was able to come in with fracking technology, expertise and knowledge. We applied this technology here and used these resources to train our workforce in managing these technologies. I am glad to see that we have been able to unlock the volumes commercially.
What are the advantages of being strategic partners with Oman Oil Company?
Sharing knowledge and best practices is a two-way street. We had an MoU for secondment of staff. As we speak, we have BP staff sitting in the Oman Oil group and vice versa. It is a two-way co-operation of best practices and an exchange of resources and people.
Developing our local talent is key to our success and through secondment opportunities we look forward to sharing best practices which will only contribute to the continuous improvement for both of our organisations.
What is BP Oman doing to increase the know-how and capabilities of local entities and workers?
The first phase of the Khazzan project has generated good training for all contractors. People have learned from it. They performed safely and I expect to see even better performances in terms of schedule, cost and quality down the line.
We want to leverage BP’s expertise. We bring it to Oman to develop our staff, especially young people, as well as send our Omani staff to work abroad in other BP environments. We want our staff to learn best practices in diverse regions and work cultures and bring back their valuable experiences to grow in BP Oman or even in other BP locations outside Oman.
We currently have Omani staff holding international jobs in the GCC and outside it. For example, there are drilling jobs in Egypt and the Gulf of Mexico, and technicians in Papua New Guinea in our LNG facility in Indonesia. We have 16 people outside the country on short- or long-term assignments. We would like to see this number increase and see diversity in BP Oman.
Our 90% [Omanisation target], whenever we reach it, does not mean that all Omani staff would be inside Oman. It would also consist of the Omani workforce working abroad along with some international presence in BP Oman’s staff. Transfer of knowledge while maintaining diversity is very important to an international company such as BP.
We have expat professionals that play an extremely important role, not only in terms of their performance in their respective jobs, but also because we depend on them for this transfer of knowledge.
What initiatives is BP taking to pursue greater economic diversification and sustainability?
In the past we have focused on our upstream business. We were spending a lot of time making sure we commissioned and completed projects safely, below budget and ahead of time. Now, we have started to look at integrating different BP businesses in Oman. We started a strategy that consists of targeting low-carbon growth and low-carbon projects.
We have been in discussion with BP’s renewable solar group. Lightsource BP Renewable Energy Investments has submitted a prequalification for solar projects in Oman. One is for the 500-MW solar project by OPWP [The Oman Power and Water Procurement Company] in Ibri, and the other is for the 100-MW solar project by PDO in southern Oman.
Lightsource BP has recently prequalified along with 11 other companies and we look forward to receiving a positive outcome over the coming months. We believe that this consortium is strongly positioned to deliver this project by combining experience of developing, building and operating utility-scale wind, solar, biopower and gas-fired projects around the world, together with BP’s experience of building and operating large-scale projects in Oman.