Oil & Gas

Shell Oman is accelerating its gas exploration efforts in Oman to enhance productivity and increase its market share in the Gulf country. The company aims to capitalize on the recent boom in Oman's gas sector, which has become a focus for investment following the disappointing stabilization of crude production from new oil fields.

Oman's gas exploration is set to experience significant growth in the coming years, with production expected to reach approximately 130 million cubic meters per day by 2025. The share of gas in Oman's energy mix is projected to rise to over 50% by the middle of the decade, up from around 35% in 2015, according to the Washington-based Specialized Energy Platform.

Shell Oman plans to expand its gas exploration, particularly from onshore blocks, following a slight overachievement of the target production of 500 million cubic feet per day (5.2 billion cubic meters per year) in Block 10 as of May 2024. Company president Waleed Hadi mentioned an ongoing exploration campaign to exploit the potential in Blocks 10 and 11, part of the gas-rich Greater Barik area managed by Petroleum Development Oman.

Hadi highlighted the sophistication and quality of Oman's gas sector, despite it not being the world's largest LNG exporter. Shell Oman, the primary private shareholder in Oman Liquefied Natural Gas Company (OQ), aims to increase gas production for both domestic use and export. The company acknowledges the potential in Blocks 10 and 11, although the scale of gas production remains uncertain.

French energy giant TotalEnergies announced early in 2024 that Oman LNG plans to establish a fourth production unit at its 11.4 million tonnes per annum liquefied gas export terminal, Qalhat LNG. Shell Oman intends to significantly boost gas production by accelerating exploration efforts, with an expectation to harness the growth potential of Blocks 10 and 11 by mid to late 2025. Gas from Block 10 is sold to the government through the Integrated Gas Company. Shell Oman holds a 53.45% stake in Block 10, with Marsa LNG and Oman LNG holding 33.19% and 13.36% stakes, respectively. Block 11, which has shown physical gas discoveries, is still being evaluated for its production potential.