Shell signs gas concession agreement for Block 10 in Oman
Dec 21, 2021
Shell Integrated Gas Oman BV, a subsidiary of Royal Dutch Shell plc, along with its partners, OQ and Marsa Liquefied Natural Gas LLC (a joint venture between TotalEnergies and OQ), have signed a concession agreement with the Ministry of Energy and Minerals on behalf of the government of the Sultanate of Oman to develop and produce natural gas from Block 10. The parties also signed a separate gas sales agreement for gas produced from the block. The two agreements follow an interim upstream agreement signed in February 2019.
Shell’s entry into this block signifies a further commitment to Oman, while enhancing and diversifying Shell’s gas supply.
“These agreements represent a major step for Shell and for our relationship with Oman. They generate value and strengthen our Integrated Gas business, which we need to deliver the energy Oman and the world need today. And we are looking at how Shell can help Oman with developing low-carbon energy in the future,” said Wael Sawan, Shell Integrated Gas, Renewables and Energy Solutions Director.
The concession agreement establishes Shell as the operator of block 10, holding a 53.45% working interest, with OQ and Marsa Liquefied Natural Gas LLC holding 13.36% and 33.19% respectively. For the initial phase, Petroleum Development Oman (PDO) is building the infrastructure for the project, including the main pipeline to the Saih Rawl gas processing facility, on behalf of the Block 10 venture partners. The venture will drill and hook up wells to maintain the production beyond the initial phase. The block is expected to reach production of 0.5 billion standard cubic feet of gas per day (bscf/d). Start up is expected within the next two years.
In addition, Shell and Energy Development Oman (EDO) signed an agreement to process the natural gas from Block 10 in EDO’s Saih Rawl facility.
H.E. Dr Mohammed Al Rumhi, Minister of Energy and Minerals in Oman said: “We share a long and strategic collaboration with Shell and our other partners. This project will further maximise the potential of Oman’s energy industry, in line with the Sultanate’s strategy to create growth opportunities across all energy streams and in line with Oman’s Vision 2040 priorities.”
Shell and the government have agreed that, in parallel to the development of Block 10, Shell will develop options for a separate downstream gas project in which Shell could produce and sell low-carbon products and support the development of hydrogen in Oman. Any project would be subject to further agreements and future investment decisions.
Notes to editors
- Updated December 22, 2021: This press release was amended with a correction regarding the gas fields in Block 10. The agreement is not to develop the Saih Rawl field, as previously mentioned, but the gas from Block 10 will be processed at the gas processing plant in Saih Rawl. There are a number of gas accumulations in Block 10, the main gas field that will be developed is Mabrouk North East.
- Block 10 is located in the Al Wusta Governate of Oman – around 400 kilometres from the capital, Muscat.
- Block 10 covers an area of approximately 1200 km2.
About Oman Shell
Shell has been a partner in Oman’s development and progress over the last several decades. We have been providing pioneering technologies and expertise in the energy industry and creating value for the community.
Shell is active in Oman across the oil and gas industry and is involved in joint venture and independent activities ranging from research and development, exploration and production to trading, retail and new energies. Shell also implements an extensive social investment programme that contributes to the sustainable development of the country.
Shell holds interests in Petroleum Development Oman (34%), Oman LNG (30%) and Shell Oman Marketing Company (49%). Together they represent a substantial part of Oman’s economic growth.
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