Royal Dutch Shell and Oman Oil Company Exploration & Production (OOCEP) have signed a Heads of Agreement for cooperation in resource exploration in an oil and gas block in Oman, the Omani company said on Twitter on Wednesday.
Under the cooperation agreement, Shell Exploration and OOCEP will carry out an initial aerial study, before deciding whether to launch more activities in Block 42, Times of Oman reports.
The block spans on an area of 25,600 square kilometers (9,884 square miles) and could have oil and gas reserves in several geological plays. Block 42 mostly consists of the northeast coastal range of the Omani mountains and the basin immediately to their south. The presence of hydrocarbons has already been proven by exploration wells, which report hydrocarbon shows in several reservoir intervals, OOCEP says.
“We are partners in Kazakhstan and this is first cooperation of its type between Shell and OOCEP in Oman,” said Chris Breeze, Shell’s Country Chairman in Oman, as quoted by Times of Oman.
In Oman, Shell has a 30 percent stake in Oman LNG LLC, and was involved in the design and construction of the plant in Sur, as well as development of gas wells, a gas processing plant, and pipelines. The Anglo-Dutch oil major also holds 49 percent in Shell Oman Marketing, which sells fuels and lubricants and manages Shell-branded filling stations. Shell also owns 34 percent in Petroleum Development Oman, an exploration company in which Oman’s government has 60 percent.
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Last week, reports suggested that Oman was planning to sell stakes in state-owned oil and gas downstream companies in a bid to prop up its finances after the oil price crunch from 2014. The plans, however, will not include Petroleum Development Oman, which pumps more than 70 percent of the Sultanate’s crude oil and nearly 100 percent of its natural gas.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.