LONDON – BP BP.L has started production at Oman’s giant Ghazeer natural gas field, which is set to underpin the company’s oil and gas output for years as it shifts to renewables.
The London-based firm said Ghazeer, the second phase of the development of Block 61, started four months ahead of schedule.
BP is in the midst of the largest overhaul in its history after Chief Executive Bernard Looney set out a path to shift rapidly towards renewable power and reduce BP’s oil and gas production by 1 million barrels per day (bpd) by 2030.
But oil and gas is set to help pay for the move.
“It is absolutely central for BP because it generates the funding allowing us to invest in new businesses and transform the company,” Gordon Birrell, BP head of oil and gas operations, told Reuters.
BP shares, which remain near 25-year lows, were down 1.4% by 0922 GMT. The shares have lost 54% so far this year due to concerns about a drop in oil and gas demand as a result of the coronavirus epidemic and long-term worries about its strategy.
BP, which wants to sell $25 billion of assets by 2025, is in talks to sell down its Oman stake, industry sources have said.
The first phase, Khazzan, was brought online in September 2017. Total production capacity from the block is expected to reach 1.5 billion cubic feet of gas a day and more than 65,000 bpd of associated condensate.
BP holds 60% of the Block 61 project, Oman’s national oil and gas company has 30% and Malaysia’s Petronas [PETRA.UL] holds another 10%.
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