PTTEP MENA Limited, a subsidiary of PTTEP, has signed a sale and purchase agreement with BP Exploration (Epsilon) Limited for a 20 percent stake in Oman’s Block 61.
The deal has a transaction value of $2.45 billion, which excludes potential contingent payments capped at a maximum amount of $140 million, which are subject to certain milestones being accomplished. PTTEP said the acquisition will be funded from cash available on its balance sheet.
The transaction, which is expected to gain government approval this year, will immediately add to PTTEP’s petroleum reserves and sales volumes, foster its long-term growth, and open up further investment opportunities in the Middle East, PTTEP noted. On completion, BP will hold a 40 percent interest in the asset, with Oman’s national oil company, PTTEP MENA, and PC Oman Ventures Limited, a subsidiary of Petronas, holding 30 percent, 20 percent and 10 percent participating interests, respectively.
PTTEP describes Block 61 as a producing onshore gas field with “enormous” resources and “significant importance” to Oman’s natural gas market. The block, which covers around 3,950 square kilometers in central Oman, has a target of developing total gas resources of 10.5 trillion cubic feet.
“Since 2019, PTTEP has invested in key assets in Oman including PDO (Block 6), the largest onshore oil field in Oman, and Oman LNG, the only LNG gas liquefaction complex in the country,” Phongsthorn Thavisin, the chief executive officer of PTTEP, said in a company statement.
“The investment in Block 61 is aligned with PTTEP’s direction of growth, focusing on highly prolific areas, and supports our strategy towards gas value chain investments as gas produced from the block will boost availability of gas supply for Oman LNG,” he added.
“This successful acquisition will further strengthen PTTEP’s foothold in Oman in the long run and pave the way for future investments in the Middle East,” he went on to say.
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