LONDON: British energy giant BP yesterday said it had sold a 20-percent stake in Oman's block 61 gas field to Thailand's state-controlled PTTEP for $2.6 billion. BP, which like its peers has been hit hard as coronavirus lockdowns slash energy demand, will retain a 40-percent stake and continue to operate the block, it added in a statement. "We are committed to BP's business in Oman," said BP chief executive Bernard Looney.
"This agreement allows us to remain at the heart of this world-class development while also making important progress in our global divestment program." Looney, who took over the reins at BP a year ago as the pandemic began taking hold worldwide, the group is looking to raise $25 billion from asset sales by 2025. Its previous divestment was last year's sale of BP's petrochemical business to privately-owned rival Ineos for $5.0 billion. Block 61, which covers around 3,950 square kilometers in central Oman, contains the largest tight gas development in the Middle East, Monday's statement added.
Tight gas refers to natural gas trapped in rock. In a separate statement, PTTEP said its entry into one of the largest gas developments in the Middle East "will immediately add to the company's petroleum reserves and sales volumes... and open up further investment opportunities" in the region. "Block 61 is a producing onshore gas field with enormous resources and significant importance to Oman's natural gas market," it said, adding that it has the capacity to deliver about 35 percent of total gas output in the Gulf sultanate. The announcement comes ahead of BP's 2020 results today.
The group made a second-quarter net loss $16.85 billion, followed by a much slimmer $450 million loss after tax in the third. BP is meanwhile axing 10,000 jobs, or 15 percent of its global workforce, after the pandemic caused huge asset writedowns. After companies worldwide closed their doors and airlines grounded planes at the height of the COVID-19 outbreak towards the end of last year's first quarter, oil prices dropped off a cliff, even briefly turning negative. Prices then rebounded sharply and are currently trading above $50 per barrel. - AFP