UPDATE 1-BP sells 20% stake in Oman gas development to Thailand's PTTEP

(Adds comment from PTTEP, background on BP)

Feb 1 (Reuters) - Oil major BP Plc agreed on Monday to sell a 20% stake in Oman’s Block 61 to Thailand’s state-owned energy firm PTT Exploration and Production for $2.6 billion.

The London-listed firm said it would continue as an operator of the block, which contains a large tight-gas development in the Middle East, with a 40% interest.

The deal is another step towards BP’s goal to sell $25 billion of assets by 2025 in order to reduce debt and prepare for its shift towards renewables.

“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,” said BP’s Chief Executive Bernard Looney.

PTTEP said the purchase fits with its strategy to focus on prolific areas in the Middle East and to partner with large oil and gas companies.

“This investment will fit well with our strategy to increase gas portfolio, in order to minimize the impact from oil price fluctuation and to venture into LNG value chain strategy,” PTTEP said in a statement.

The Thai oil and gas firm said it would fund the purchase using its existing cash.

Block 61 already had two phases of development - Khazzan tight gas project, one of the largest upstream projects in the small Gulf state, and Ghazeer project which began production in October, BP said.

Other partners in the block are Makarim Gas Development Llc with a 30% interest and Malaysia’s state energy firm Petronas’ unit PC Oman Ventures with a 10% participating interest.

Reporting by Yadarisa Shabong in Bengaluru; Editing by Krishna Chandra Eluri