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Oman - PDO's Focus On Non-Conventional Gas.

Being the operator in PDO, Shell is aggressively looking to exploit non-conventional gas in its Block-6 concession. Shell's man who is PDO's managing director, Raoul Restucci, says the state-controlled company's ambition is visible in its attempt to appraise and develop the Khulud tight gas fields in the northern part of its concession. He describes the Khulud project as PDO's first tight gas pilot likely to shape the course of its strategy to develop its non-conventional gas resources.

It is said that Block-6 also contains fairly large shale gas resources yet to be re- explored. Un-locking the potential of such accumulations typically entail huge challenges posed by the extreme tightness of the reservoir rock, target reservoir depths of up to 5,000 metres, and prevailing temperatures of around 180 degrees centigrade.

Compounding these challenges is the sour nature of the tight gas in the Khulud region. Restucci says these collectively make the PDO project "complex and testing by most industry standards". Furthermore, given the need for long-term testing to prove the commerciality of the tight gas accumulations, an early production system has also been delayed.

The Khazzan-Makarem tight gas fields in Block-61, being developed by BP, are expected to produce between 1,000-1,500 MCF/d by 2020. BP's 40% partner in Block-61 is the state-owned Oman Oil Co. (OOC). The MOG and BP in late 2013 signed a final agreement on the Block-61 concession. But it is still not clear whether this included the price of the gas which the government (OGC) will pay to the BP-OOC partnership.

The deal has an estimated cost of $16bn over 30 years, and is expected to increase Oman's natural gas production by one-third. BP joins a long list of foreign companies which have invested in Omani oil and infrastructure in recent years. The advantages of Oman's proximity to the Persian Gulf, the Gulf of Oman, and the Arabian Sea grant it access to some of the most important energy corridors in the world.

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Publication:APS Review Gas Market Trends
Date:Feb 15, 2016
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