British energy company BP said it extended an agreement in Oman to help develop a natural gas field that may require hydraulic fracturing to exploit fully.

BP and Oman Oil Co. signed a deal with the government to revise a license area for so-called Block 61 to further develop the Khazzan natural gas field. The British energy company said the field holds a "significant" amount of natural gas that will "need to be hydraulically stimulated to flow gas at target rates."

Hydraulic fracturing led in part to the substantial increase in U.S. oil and natural gas production, though the success rate has not been replicated elsewhere in the world to the same extent.

Khazzan entails exploitation of what BP says is one of the largest deposits of natural gas of its kind in the Middle East. Peak production could reach 1 billion cubic feet per day, about one third of Oman's total daily domestic gas supply.

Already progressing at the field, BP is on pace to start producing gas from the Khazzan development by the end of next year. Oman is the largest regional oil and gas producer that's not a member of the Organization of Petroleum Exporting Countries and Isam bin Saud al-Zidjali, the CEO of the Oman Oil Co., said exploiting the gas would be transformative.

"This project contributes to Oman's economy in various ways; to begin with, the gas will provide feedstock for development of downstream/petrochemical industries," he said in a statement. "Once the project is on stream it will increase the overall supplies of gas and adds additional resources to the country."

In a research note from July, Moody's said Oman's economy is subject to moderate risks. The ratings agency said the country's finances may be better off next year than last year, when oil was trading in a market clearly favoring the supply side.

BP's regional subsidiary awarded a combined $730 million drilling contract to help tap into early developments at Khazzan in 2014.

"This expansion will build on our work on the first phase, working closely with our Omani partners and demonstrates our commitment to invest in a significant project that will deliver long-term value to both Oman and BP," CEO Bob Dudley said.