BP wins Oman gas fields concession, official says

MUSCAT, Dec 17 (Reuters) British Petroleum has won a concession to develop two large natural gas fields in central Oman, an Omani energy ministry official said on Sunday.

''The government will sign the concession agreement with BP soon,'' said Khalifa al-Hinai, technical adviser at the Ministry of Oil and Gas.

Several international firms have bid to develop tight gas reserves in the Khazzan and Makarem fields, which cover 2,500 kms (1,553 miles) and are near existing gas fields of majority state-owned Petroleum Development Oman (PDO).

''We expect a large quantity of gas from these fields,'' Hinai said without specifying volumes. He was speaking on the sidelines of an event to open a regional office for British Gas.

Energy ministry undersecretary Nasser al-Jashmi has been quoted as saying gas initially in place in the two fields was estimated at more than 10 trillion cubic feet, located at depths of up to 4,650 metres.

Earlier this year, British gas and oil firm BG Group signed an exploration and production sharing agreement with Oman for Block 60, which contains the Abu Butabul gas and condensate discovery.

Oman, an independent oil producer, has said it plans to triple its natural gas output to 70-80 million cubic metres per day in the next five years. The sultanate plans to spend billion over that period to boost oil and gas output.

''We have to meet the increasing demand from industries when they go on stream. Some gas-based industries start commercial operation by 2008 and some others by 2009,'' Hinai said.

Oman is investing more than billion in projects in the industrial city of Sohar, including an aromatics complex, an aluminium smelter and a polypropylene plant.

REUTERS SBA GC1932