Malaysian state oil firm Petronas is to acquire a 10 per cent stake in Oman’s Khazzan gas development project from the Oman Oil Company for Exploration and Production (OOCEP).

International Oil Company BP is the operator of the Khazzan tight gas project, also known as Block 61, which OOCEP owns 40 per cent through its subsidiary Makarim Gas Development.

Upon completion of the deal, the project in central Oman will be held by BP (60 per cent), in partnership with OOCEP (30 per cent) and Petronas’ PC Oman Ventures (10 per cent).

‘The completion of the transaction is subject to approval from the Sultanate of Oman’s government and other closing conditions’, OOCEP tweeted.

“The deal could be worth in excess of $1.3bn to OOCEP. The consideration will be important for the company as spending on Khazzan's second phase, Ghazeer, ramps up,” Liam Yates, from energy consultancy Wood Mackenzie’s Middle East upstream team, said.

“OOCEP paid $136m for the equivalent 10 per cent stake in 2013 when the first phase of development was sanctioned; the stake is now worth $1.3bn. The value reflects the significant cost savings and reserves expansion following sanction of the second phase earlier in 2018.”

Work at the second phase of the Khazzan gas field project, known as Ghazeer, is progressing on track and around 33 per cent has been completed.

Khazzan’s gas output enabled state exporter Oman LNG to export at record levels this year. The field is production roughly 1 billion cubic feet a day (cf/d), and should increase output to 1.5 billion cf/d in the early 2020s, when Ghazeer comes onstream.