BG, the big British gas group, is relinquishing its concession in Oman, intensifying the sultanate's gas supply woes. The company said yesterday it had informed the government of its decision to walk away from Block 60, an onshore concession covering about 1,500 square km, despite having found gas and condensates with each of the seven appraisal wells it had drilled. "We are finalising our exit from the block," said a BG spokeswoman. "We need to prioritise other opportunities across the globe for development."
The block contains the Abu Butabul gas and condensate reservoir, discovered in 1998, which has proved technically challenging to develop. "Abu Butabul is a tight gas discovery and the ability to get gas to flow effectively and efficiently will be key to determining commercial viability," BG said on its website. The firm had been aiming to start gas production in late 2012. BG's exit will mean delays in developing those reserves at a time when Oman faces gas shortages due to rising demand for power generation and industry.
tcarlisle@thenational.ae