Oman Shell ramps up Blocks 10 & 11 gas exploration

https://www.omanobserver.om/article/1140391/business/oman-shell-ramps-up-blocks-10-11-gas-exploration

OMAN DAILY OBSERVER / 21 JULY 2023

CONRAD PRABHU

MUSCAT: Oman Shell, wholly owned subsidiary of energy major Shell, is accelerating its exploration campaign to unlock the natural gas potential of its directly operated concessions, Block 10 and Block 11 in central Oman, output from which could ultimately support a future blue ammonia project.

Block 10 began producing gas earlier this year, marking Oman Shell’s maiden hydrocarbon output from an upstream asset outside of Block 6 – the country’s dominant producer of oil and gas operated by Petroleum Development (Oman), in which Shell plc has a 34 per cent shareholding.

“We have recently started up our Block 10 gasfield, which is Shell’s first directly operated venture in Oman, and are actively exploring for further gas potential,” said Walid Hadi, Senior Vice-President and Country Chair of Oman Shell.

“Block 10 is a very special project for us because we run it in collaboration with?OQ ?and other partners, but it is the first business in Oman that we directly operate. We signed the agreements in December 2021 and in just over a year, in January 2023, we were able to kick-off production, having drilled all the wells that were slated for the initial phase,” The Business Year, a leading UK-based energy news portal, quoted Hadi as stating in a recent interview.

Output from the Block, according to the official, is projected to reach the plateau target of 0.5 billion cubic feet (bcf) per day by early 2024. These volumes are currently being pumped into the gas transportation system of OQ Gas Networks (OQGN), which supplies a long list of domestic consumers and Oman LNG as well.

Significantly, efforts are underway to expand the gas resource base of Block 10, as well as Shell’s directly operated concession, Block 11, located to the north and south of Block 10.

“We believe Oman has room to grow in gas, both because the country needs it and because we see an attractive resource base still within Block 10, but also in the exploration fields that we are developing at the moment in Block 11, where we are trying to accelerate exploration paired with some other parts of Block 10.”

Under agreements signed with the Ministry of Energy and Minerals in December 2021, Shell plc subsidiary Shell Integrated Gas Oman BV holds a 53.45 per cent working interest in Block 10, with OQ and Marsa Liquefied Natural Gas LLC (a joint venture between TotalEnergies and OQ) holding 13.36 per cent and 33.19 per cent respectively.

Shell announced at the time that it plans to exploit the gas reserves of Block 10 and 11, featuring a number of gas accumulations, to produce blue ammonia for the local market if the project is found feasible.

“The aim now is to stabilise the start-up of the existing phase in Block 10, get it to plateau, while understanding the “behaviour” of the field – the reservoirs, the subsurface facilities, etc,” Hadi noted in the interview to The Energy Year.

The official also affirmed Shell’s keen interest in opportunities linked to ‘carbon capture, utilisation and storage (CCUS)’, particularly from the standpoint of utilising CO2 as a “resource with value in applications from upstream to synthetic LNG to industry”.?An agreement signed by Shell with PDO in May 2022 aims to assess aspects of reinjecting and storing CO2, he said.

“We are excited about this collaboration because of the diversity of reservoirs in PDO’s portfolio, while on our side we can transfer them the technology and the know-how that Shell has accumulated around the world. CCUS will also be a pillar for the blue hydrogen value chain, which is in turn important because it can be competitive earlier, helping accelerate the conversion from grey to green,” Hadi added.