(MENAFN - Muscat Daily) Muscat- As BP's Khazzan gas field project is progressing well, the energy giant's group chief economist said that the company is investing in a long-term strategic relationship with Oman.
'Khazzan project is going ahead fantastically well. Both BP and Oman are proud of this strategic major project. The phase 2 of Khazzan project is also looking incredibly impressive. BP has a long-term strategic relationship with Oman. The project is producing gas that will contribute to Oman's economy in a big way,' Spencer Dale said in an exclusive interview with Muscat Daily during his visit to Oman last week.
He said, 'Khazzan is a tight gas project. One of the reasons that BP has been so successful at Khazzan – where other companies failed – is that BP had put all its learning and knowledge from shale gas business and used it here in Oman.'
Earlier this year, BP together with its partner Oman Oil Company Exploration & Production (OOCEP) approved the development of Ghazeer, the second phase of the giant Khazzan gas field. The final investment decision for the second phase follows the successful startup of Khazzan's first phase of development in September 2017.
Dale said BP's final investment decision on phase 2 of Khazzan project was made during a low oil price environment, which was a very significant move by the group. 'This reflects BP's long-term commitment to Oman. We found Khazzan project working well and we found we have done really good things with the Omani government. We remain full committed to the sultanate.'
Commenting on the visit of BP's board of directors to Oman earlier this year, Dale said the board visit to Oman demonstrated BP's full commitment to the Khazzan project. 'The message from the board's Oman visit was very important. Outside the US and UK, the BP board only visit the countries where the company has developed long-term strategic relationships. We are committed to a long-term strategic relationship with the sultanate.'
Talking about the global oil market, Dale said the oil market has shown the signs of rebalancing in recent months as the production cuts by OPEC and partners have worked. 'The success of their cooperation has been reflected in oil prices in recent months.'
He added that the recent surge in oil prices is also related to the worsening political and economic situation in Venezuela and the US pullout from Iran nuclear deal. 'These developments may send oil prices even higher in near future. However, my best guess is that these higher levels of prices are not likely to persist in the long run, it may persist only over a period of time. At BP, we certainly do not expect prices to stay at these high levels in long term.'
Dale warned that the higher oil prices are not likely to persist at the current levels in the long term and the Gulf oil producers should not think the problems are over for them. 'The key message for Oman and other GCC countries is that they should continue pushing to diversify their economies away from oil. In Oman, I believe the government is well aware of this urgency and working hard to diversify the economy.
Tanfeedh initiatives have been designed to achieve some of those objectives. It is very important for the GCC states to keep pushing for economic reforms and diversification efforts.'