State-owned Petroleum Development Oman (PDO) recently announced plans to invest about $10 billion into three major onshore projects over the next five to 10 years, a report said.

The three initiatives earmarked for development – Rabab Harweel, Yibal Khuff and Budour – are all located in the south of PDO’s Block 6 concession, added the report from Oxford Business Group.

Estimates suggest that the block’s reserves could contribute up to one-third of PDO’s future oil production and expand its gas output significantly.

In a separate development, the state-owned national petroleum investment company Oman Oil Company (OOC) and BP inked a deal in mid-February to extend their exploration and production-sharing agreement at the Khazzan natural gas field into a second development phase, which will see an additional 1000-sq-km block added to the project.

The Khazzan field, which will now cover a total area of 3700 sq km, will be developed in phases, with plans for it to be fully operational by 2020. Developers expect production in the order of 1.5 billion standard cu feet (scf) of gas per day, equivalent to 40 per cent of Oman’s current output.

Estimates suggest that the field holds at least 10.5 trillion scf of recoverable gas reserves. Bob Dudley, CEO of BP said that the $16 billion project, which involves more than 325 wells over 15 years, as well as construction of a three-train central processing facility, will deliver long-term value.

“Khazzan is a major resource with the potential to produce gas for Oman for decades,” he said in a statement.

Additional gas supplies will provide welcome feedstock for processing, supporting Oman’s plans to expand its downstream and petrochemicals sectors. Supplies will be used for domestic energy consumption and channelled into the country’s growing network of chemical plants, including the $3.6 billion Liwa plastics development at Sohar, which is due to come on-line in 2019.