LOS ANGELES, April 15, 1999(PRIMEZONE) -- Occidental Petroleum Corporation (NYSE: OXY)announced today the signing of amended contracts that will enable a joint venture of Occidental, BP Amoco p.l.c. and Fortum Oyj of Finland to appraise previous natural gas discoveries and to explore for new gas reserves in a 14,000-square-kilometer area of interest in northern Oman consisting of Blocks 9, 15, 27, 31 and 44.
The natural gas to be developed will be targeted for markets in northern Oman, around the city of Sohar, with remaining volumes supplying markets in the northern United Arab Emirates (UAE) through BP Amoco's large natural gas supply hub in Sharjah. Occidental has a 26 percent interest in the joint venture, with BP Amoco and Fortum holding 60 percent and 14 percent, respectively.
The partners expect the appraisal of reserves from earlier discoveries, together with the development of the associated gas from Occidental's Safah field, to result in production of 300 to 400 million cubic feet per day.
Occidental is leading the appraisal and exploration efforts, starting with seismic operations that recently commenced on Block 44. BP Amoco will lead the gas marketing and infrastructure development activities, including working closely with the Government of Oman to evaluate pipeline requirements.
In announcing the joint venture plans, Dr. Ray R. Irani, chairman and chief executive officer of Occidental, said, "We believe this agreement between the Government of Oman and the joint venture partners represents an important step towards realizing the government's Vision 2020 objectives. These objectives include development of gas infrastructure and gas-based industry. We also anticipate that the joint venture infrastructure will eventually be linked with other gas hubs in the region to form part of the proposed Gulf Cooperation Council gas grid."
Charles J. Pitman, regional president of BP Amoco p.l.c., who signed the agreement on behalf of BP Amoco, stated, "This Joint Venture represents a continuation of 20 years of upstream investment in Oman by BP Amoco." He also noted, "the development of gas reserves to meet market needs in northern Oman and the UAE demonstrates our belief in the dynamic growth of the region."
The first phase of the program is expected to be complete by early 2000 when a final decision on development will be made. Development plans will include development well drilling and construction of a gas collection system and processing plant in northern Oman in addition to gas transmission lines to Sohar in northern Oman and the BP Amoco- operated Sharjah gas hub in the northern UAE.
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Note: This press release may contain forward-looking statements which reflect management's expectations and are based upon data available at the time the statements were made. Actual results are subject to future events and uncertainties, which could materially impact performance.
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