BP and Oman Oil on Sunday signed a heads of agreement with the government of Oman committing to amend the Oman Block 61 exploration and production sharing agreement (EPSA), extending the licence area of the block and enabling a further development of the major Khazzan tight gas field. BP is the operator of Block 61 with a 60% interest and Oman Oil holds the other 40%, according to a press release. Under the amended EPSA, the extension will add a further over 1000 square kilometres to the south and west of the original 2,700 square kilometres of Block 61. The extension will allow a second phase of development, accessing additional resources in the area that have been identified by drilling activity within the original block. Development of this additional resource is subject to final approval of the government of Oman and of BP; both expected in 2017.   The Khazzan reservoirs in Block 61 represent one of the Middle East’s largest unconventional tight gas accumulations, with the potential to be a major new source of gas supply for Oman over many decades. Production from Khazzan will make a significant contribution to ensuring continuing stable and long-term domestic supplies of gas for Oman. Combined plateau production from Phases 1 and 2 is expected to total approximately 1.5 billion cubic feet of gas a day (bcf/d), equivalent to around 40% of Oman’s current total domestic gas production. The Phase 1 project, sanctioned in December 2013, remains on schedule to deliver first gas in late 2017. Subject to completion of the agreement and final sanction, the new Khazzan Phase 2 project will come on stream from 2020. (times of Oman)