Shell and Oman Building a Stronger Bond
While Royal Dutch Shell has closed up shop or begun to make plans to leave certain countries, one country that they plan on staying in is the Middle Eastern country of Oman. That became clear on April 28, when they announced the signing of a Heads of Agreement (HOA) deal with the Oman Oil Company Exploration & Production (OOCEP) that will consider further exploration in the area known as Block 42.
This area, located in the mountain area of Oman’s northeast coast, encompasses nearly 10,000 square miles. Hydrocarbons has already been detected as a result of exploration wells that were dug, with the HOA signed in order to check on the viability of the area. This will be handled having company personnel fly over the area and assess the situation.
Shell and Omani oil interests already have working relationships in other areas, with the company’s interest in expanding their market share in liquefied natural gas (LNG) one aspect of this move. Shell currently owns 30 percent of Oman LNG LLC, which includesa gas well development, pipelines that can transport the gas and a plant to process gas that’s obtained.
In addition, Shell Oman Marketing is 49 percent-owned by Royal Dutch Shell and focuses on management of filling stations under the Shell brand. Finally, Petroleum Development Oman is focused on exploration of new gas projects, with Shell having 34 percent ownership.
This isn’t the first agreement between Shell and OOCEP, with the two companies having previously signed an agreement to explore the Pearls oil project in the Caspian Sea in Kazakhstan. The origin of that effort began with its discovery in 2007, with exploration at the oil fields of Tulpar and Naryn following in the next few years. The potential recoverable reserves is approximately 119 million tons.