BP Awards $800M Contract To Petrofac For CPF At Khazzan

BP plc (LON:BP) (NYSE:BP) has awarded British oilfield services company, Petrofac (LON:PFC) Ltd, a contract for central processing facility (CPF) at the Khazzan Phase 2 gas development in Oman. The contract is valued at approximately $800 million.

The award closely follows on the heels of the Phase 1 CPF Khazzan project, which was awarded to Petrofac in February 2014 and was worth $1.4 billion. Phase 1 produced first gas on Sep 22, 2017.

The project scope includes the addition of a third gas train with a capacity for handling 500 mmscfd (million standard cubic feet per day). Eventually, this will boost total production capacity from the CPF to 1,500 mmscfd.

The Engineering, Procurement, Construction and Commissioning (EPCC) scope of work comprises liquid and compression trains and related infrastructure. Brownfield work to link the facilities is also a part of Phase 2 award.

BP expects to drill about 300 wells over the lifetime of the Khazzan field. Moreover, the phases are estimated to yield about 10.5 trillion cubic feet of recoverable gas resources.

BP’s presence in Oman dates back to 2007. BP is the lead partner in the Khazzan project with an interest of 60%. The remaining 40% is held by Oman Oil Company Exploration & Production.

Khazzan gas field is the sixth and largest of seven new upstream projects for BP that was due to commence production in 2017.

Price Performance

Shares of the company have gained 13% compared with the industry’s rally of 6.9% in the last three months.

Zacks Rank & Key Picks

BPcurrently flaunts a Zacks Rank #1 (Strong Buy). Other top-ranked players in the energy sector include Holly Energy Partners, LP (NYSE:HEP) , SunCoke Energy Inc (NYSE:SXC) and Northern Oil and Gas Inc (NYSE:NOG) . All these stocks sport a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Holly Energy Partners, owner and operator of refined product pipelines and terminals, delivered an average positive earnings surprise of 57.14% in the preceding quarter.

SunCoke Energy produces metallurgical coke in the United States. The company delivered an average positive earnings surprise of 113.52% in the last four quarters.

Northern Oil and Gas, based in Minnetonka, MN, is an independent energy company. The company delivered an average earnings surprise of 175.00% in the last four quarters.

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