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BP cuts stake in Oman gas project as push into renewables continues

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BP PLC (LON:BP) has cut its stake in a major gas project in Oman by a third as part of its strategy to move towards greener, renewable energy sources builds momentum.

The UK oil and gas giant has sold a 20% stake in Oman’s Block 61 to Thailand’s PTTEP Group for US$2.6bn.

BP’s stake in Block 61 will reduce to 40% through the sale but it will remain the operator of the field, which is the largest rock-based or ‘tight’ gas development in the Middle East.

Average daily production capacity from the two sites at Block 61 is 1.5 billion cubic feet of gas a day and more ‎than 65,000 barrels of condensate.

BP has had a presence in Oman since 2007 and chief executive Bernard Looney said it remains committed to the Sultanate despite this disposal.

“‎We are committed to bp’s business in Oman – this agreement allows us to remain at the ‎heart of this world-class development while also making important progress in our global ‎divestment programme.”

Looney has embarked on a programme to divest US$25bn worth of assets by 2025 as part of a plan to make the UK oil major greener and less reliant on fossil fuel earnings.

The group recently sold what remained of its petrochemical business to INEOS for US$5bn, a deal that completed at the end of 2020.

A report last week suggested the oil major had already slashed staffing levels at its highly regarded oil and gas exploration arm to around 100 from 700 a little over a year ago.

Many of these have transferred to the new low-carbon operation, the report suggested.

Looney has promised BP will increase low carbon investments 10-fold over the next ten years through a US$5bn a year investment into renewables, bioenergy and early positions in hydrogen and carbon capture.

As part of its strategy overhaul, BP has cut 10,000 staff, of which 2,800 have left already, it said, with the majority expected to have gone by the end of the 2020.

BP publishes full-year and fourth-quarter results tomorrow with a sharp fall in profits inevitable given the 35% drop in oil prices over the period.

The FTSE 100 group has already cut the dividend by 50% this year and taken a huge impairment charge following a more conservative estimate for future oil prices.

Profits are forecast to drop to below US$400mln from US$2.6bn this time a year ago.

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