Energy supermajor Shell has commenced gas exploration and appraisal in central Oman as part of its role in a first-of-its-kind, multi-billion dollar, integrated gas development spearheaded by the Ministry of Oil and Gas in partnership with other international and local upstream energy firms.
The move marks the return of the global energy heavyweight into the Sultanate’s upstream gas sector as an independent investor and operator, said Oman Shell’s Country Chairman.
“We have recently re-entered the gas business in Oman,” said Walid Hadi (pictured), in reference to Shell’s investment in the landmark integrated gas development first unveiled by the Omani government in 2018.
“It meets our strategic ambition to become a world class investment case. It means growing in the energy mix that supports the energy transition and gas is a key component of that,” Hadi noted in comments during a panel discussion held as part of the opening of the International Gas Research Conference (IGRC) 2020 that began in Muscat on Monday.
Shell, along with energy giant Total, have signed agreements with the Omani government to monetise gas resources in the Greater Barik area (encompassing Blocks 10, 11 and 12) in central Oman. Also participating in the integrated venture are Petroleum Development Oman (PDO) and Oman Oil Company Exploration & Production (OOCEP) — part of OQ (formerly Oman Oil & Orpic Group).
Under the agreement signed early in 2019, Shell and Total have broadly committed to investing in specific components of an integrated gas development that envisions sizable upstream gas exploration and development, a first-of-its-kind Gas-to-Liquids (GTL) scheme to be set up in Duqm, and a LNG terminal within Sohar Port that will provide LNG as fuel for shipping.
Affirming Oman Shell’s keen interest in the integrated gas development, Hadi stated: “Shell has started in 2019 an ambitious exploration and appraisal strategy in the central part of Oman, basically trying to de-risk and discover as much gas potential as possible in that part of the country — building on a significant discovery that PDO has done in the same place a couple of years ago; I believe it was the second largest onshore gas discovery in 2017’’.
“We are taking that play, building on it, basically putting the exploration and appraisal development on steroids over the next couple of years to enable hopefully, our partner, Total to take an FID (Final Investment Decision) on its LNG bunking facility in Suhar, and also enable Shell, hopefully in a couple of years’ time, to take an investment decision on a GTL production facility in Duqm’’.
The Country Chairman praised the Ministry of Oil and Gas for its “ambitious and forward-looking approach” that has enabled international players, including Shell, Total, BP and ENI, to invest in the upstream energy sector in the Sultanate.
That move, he noted, has started to pay dividends for the country.
“We are starting to see more investments in gas exploration and appraisal, and hopefully that will also go support Oman’s position in the LNG market in the next few decades, which we hopefully will also be a proud partner as well’’.
Oman Shell has a growing portfolio of investments in the Sultanate’s upstream sector.