Oman in talks with Shell, TotalEnergies to develop gas Block 11

Oman, the biggest oil producer in the Middle East outside OPEC, is in talks with TotalEnergies and Shell to sign a commercial agreement to develop gas Block 11, which is adjacent to gas-rich Block 10, the undersecretary at Oman's ministry of energy and minerals said Feb. 28.

Shell, Oman's state-owned energy company OQ and Marsa LNG, 80% owned by TotatlEnergies, agreed last year to develop gas from Block 10, with start-up expected in two years to eventually produce 500 MMcf/d.

"Discussions are ongoing now to finalize the commercial agreement between the government and the same [Block 10] partners for Block 11," Salim al-Aufi told an SPE virtual fireside chat.

Under a concession agreement with the energy ministry, Shell will operate Block 10 with a 53.45% stake, with OQ and Marsa holding 13.36% and 33.19%, respectively, Shell said in a statement Dec. 22.

Located in the al-Wusta Governorate of central Oman, around 400 km from the capital Muscat, Block 10 holds a number of gas accumulations, including the main gas field to be developed -- Mabrouk North East.

Awarding more blocks

Oman, which is ramping up oil and gas exploration and production, also expects to award this year three blocks that are being offered to energy companies. He didn't specify whether they will be for exploration and/or production.

"We have three blocks in the market," Aufi said. "We are just waiting for the final bids to arrive. I think last day is March 31 of this year, then we will start looking into evaluating the bids and hopefully allocating some of these blocks."

Shell, TotalEnergies and BP are some of the biggest international oil companies operating in Oman.

Shell has a 30% share in Oman LNG and a 34% stake in Petroleum Development Oman, alongside the government's 60% holding. Other partners in PDO are TotalEnergies with 4% stake, and Partex with 2%.

BP currently operates Block 61 in Oman, which produces a third of the country's gas demand

Oman's total gas production and imports rose 9.2% in the first 11 months of 2021 to reach 46.05 bcm, thanks to a 26.2% uptick in associated gas output to 8.5 bcm and a 5.9% increase in non-associated gas production to 37.6 bcm, according to the latest figures from the National Center for Statistics and Information.