CNPC Seeks BP Stake in Omani Gas Field: Press
China's CNPC is in talks to take part of BP's stake in a major gas field in Oman, sources told Bloomberg on July 31, as the UK major looks to raise cash to shore up its financial position.
BP has a 60% interest in Khazzan, but was reported in June to be seeking the sale of a 10% interest. CNPC is having advanced discussions with BP on a transaction that could raise $1.5bn, Bloomberg reported, although others have also expressed interest in the asset.
BP's partners at Khazzan are Oman Oil with 30% and Malaysia's Petronas with 10%. The field has been in production since September 2017. Its second phase, greenlit in 2018, is set to raise output from 1bn ft3 to 1.5bn ft3/day in 2021.
BP embarked on a major divestment programme last year, aiming to offload $10bn of assets by the end of 2020 and a further $5bn by mid-2021. The company said in early February it had already raised $9.4bn from sales since the start of 2019, putting it well ahead of its targets.
The Covid-19 crisis means BP is under pressure to raise yet more cash, but at the same time asset values have plunged with low oil prices. It sold some UK assets for a much lower price than had been agreed earlier, for example. BP's net debt reached $51.4bn at the end of March, $6bn more than three months earlier. It is due to report its second-quarter results on August 4.
CNPC already produces oil and gas in Oman and four other Middle Eastern countries. It made its foray into the country in 2002, when it signed a production-sharing agreement for a 50% stake in the Block 5 oil project. Texan producer Occidental Petroleum is also in talks to divest assets in Oman with Indonesia's state-owned Pertamina.