MUSCAT: Payments reported by energy major Shell to Omani government bodies from extractive activities declined by about 13 per cent to $3.99 billion in 2025, despite an increase in oil production from its flagship Block 6 in the Sultanate of Oman, according to company and official data.
The decline from approximately $4.59 billion in 2024 does not by itself indicate weaker production or operating activity. Payments disclosed under petroleum agreements may vary according to oil and gas prices, taxable income, production entitlements and the timing of financial settlements.
Shell’s Report on Payments to Governments for the year 2025 recorded $3.41 billion in taxes, $576.9 million in government production entitlements and $900,000 in fees in Oman. The comparable 2024 total included approximately $3.95 billion in taxes, $633.7 million in production entitlements and $900,000 in fees.
The largest component in 2025 was $3.39 billion in taxes associated with the Block 6 concession. Block 10 accounted for about $598.3 million, comprising production entitlements, taxes and fees, while Block 11 accounted for $500,000 in fees.
Production data published by Energy Development Oman, however, show that output from Block 6 did not decline during the same period. Average oil production from PDO-operated assets increased to 706,000 barrels per day (bpd) in 2025, from 680,000 bpd in 2024. Total production, including oil, non-associated gas and condensate, rose to 1.128 million barrels of oil equivalent per day (boepd), compared with 1.117 million a year earlier.
The figures represent 100 per cent of PDO production and should not be presented as production attributable solely to Shell or any other shareholder.
Shell holds a 34 per cent interest in PDO and is entitled to 34 per cent of oil produced from Block 6. The government’s interest in PDO and the oil concession is held through Energy Development Oman.
The physical volume of the Block 10 production entitlements disclosed by Shell also edged higher. The 2025 report recorded in-kind entitlements totalling 11.771 million barrels of oil equivalent, compared with 11.646 million barrels of oil equivalent in 2024.
Their reported value nevertheless declined to $576.9 million from $633.7 million. This suggests that the lower financial value was not caused by a reduction in the disclosed entitlement volumes.
EDO’s financial data show that the average realised price of Oman blend crude fell to about $70 per barrel in 2025, from $80 in 2024. Over the same period, EDO’s revenue declined to $14.8 billion from $16.1 billion, while royalty and current income-tax payments fell to $7.5 billion from $8.9 billion. These broader figures are not directly equivalent to Shell’s payments, but they provide relevant context on the effect of lower prices across Block 6.
Economic and energy analyst Ali al Riyami said the decline in the amounts reported by Shell should not be interpreted as evidence of weaker operations. He said the payments were determined through accounting and financial calculations influenced mainly by oil prices, as well as taxes, premiums and other elements included in the amounts due to the government.
Al Riyami noted that operations had continued and oil production had increased from the previous year, reinforcing the distinction between changes in output and changes in the monetary value of reported payments. The available evidence therefore points to lower realised prices and the financial mechanisms used to calculate taxes and production entitlements as more likely explanations for the decline than lower production.
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