Exclusive: Shell plans to develop PDO’s new gas discovery in Block 6 – Interview


هذه الصفحة متوفرة بهذه اللغة: العربية

24 July 2018

Muscat (WAF): Shell’s recent MoU with the government of Oman includes a proposal to build a Gas to Liquids (GTL) plant in Duqm, and upstream gas operations in the northern part of Block 6, Chris Breeze Country Chairman of Shell Development Oman told WAF News in this exclusive interview.

Last year, the Government of Oman invited international oil companies (IOCs) to present proposals to explore and develop upstream and downstream gas operations in the northern area of block 6. “The proposals had to be linked to some downstream options, to support the government’s main drive towards diversification and maximising in-country value in the form of job creation and further industrial linkages as part of the development of the gas resources”, Breeze said.

 “The whole process started in the summer of 2017 when the government of Oman made data for the northern part of block 6 available to a number of IOCs, and we expressed our interest in examining the data and providing proposals on how best to develop and maximize gas resources from the area of interest”, Breeze explained.

“As a result, the government now has more options to develop multiple downstream projects with different operators in such a large area”, he added.

Breeze said that Shell is currently in further negotiations with the government of Oman on the proposed developments.

Block 6 & Mabrouk North East

In March, Petroleum Development Oman (PDO) announced a new major gas discovery (Mabrouk North East) in the northern part of its concession area Block 6. The majority-state-owned operator said in a press statement on 19th of March that the “gas find with estimated recoverable reserves of more than four trillion cubic feet (TcF) and 112 million barrels of condensate”

As the owner of the new gas discoveries in Block 6, the government of Oman had the choice to either invest in developing the gas through the current operator setup, or to invite international investments to lighten the immediate burden on the national budget.

Based on initial data for the area, there are discovered but not yet fully appraised gas resources and “the risked exploration volumes represent a further amount on top of what has already been discovered. So it is possible that there is potentially further exploration upside”, Breeze commented.

Upstream & Downstream partners

“For the upstream part of the proposal, we entered an upstream joint bidding agreement with Total”, Breeze said about the joint venture with the French IOC. He added that the MoU with the government of Oman includes developing discovered but not developed resources and new explorations as well.

“Total and Shell as operator will develop several natural gas discoveries located in the Greater Barik area on onshore Block 6 with respective shares of 25% and 75%, as per the agreement between both companies and before possible State back-in, with the objective of an initial gas production of around 500 MMcfd and a potential to reach 1 bcf/d at a later stage”, Total said in a statement after signing the MoU with the government of Oman in May 2018.

Breeze said that once it was clear that the Government’s main objective was the creation of downstream jobs, Shell was looking to have a government partner like Oman Oil Company in the downstream projects.

“Once the agreement is signed, Shell will act as the new operator of the area of interest on behalf of the government of Oman, with Total and OOC as partners, and of the GTL plant with OOC as a partner”, he added.

Shell’s gas production will depend on the availability of outlets to use the gas, including the proposed Duqm GTL plant, possibly LNG and other downstream gas consumers. “In order to make any money, we have to find downstream outlets for the gas we produce”, Breeze said.

In 2015, the government of Oman doubled the gas prices for most of the industrial consumers from US$1.5 mBtu to US$3, plus a 3% annual rise.


Chris Breeze told WAF that the proposed location for the GTL plant is the newly developed Special Economic Zone of Duqm.

Apart from the main GTL products of cleaner-burning naphtha, kerosene and gasoil, “two of the main side products of the proposed plant are electricity and pure water that can be used for industrial and commercial purposes”, Breeze told WAF, assuring the goal of synergy with other planned petrochemicals’ projects in Duqm.

The Memorandum of Understanding also covers renewable energies. Shell, The State General Reserve Fund (SGRF) and EnerTech are planning to join forces to develop, operate and maintain renewable energy projects.