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Oman reassigns oilfield to Oxy group, drops Shell

DUBAI — Gulf crude producer Oman has reassigned its Mukhaizna oilfield to Occidental and a United Arab Emirates partner after a dispute with Royal Dutch/Shell over boosting output, the official Oman News Agency (ONA) said.

Published: Mon 2 May 2005, 10:34 AM

Updated: Wed 8 Nov 2023, 3:21 PM

  • By
  • (Reuters)

The news comes as a setback for Shell, which will lose out on Mukhaizna’s estimated reserves of 2.4 billion barrels, analysts said.

The Anglo-Dutch oil giant is still recovering from last year's reserves overbooking scandal. It remains, however, the dominant foreign investor in Oman’s energy sector despite having Mukhaizna taken from it.

US company Occidental and the UAE’s Liwa Energy — part of Abu Dhabi’s Mubadala group — aim to invest more than $2 billion to increase Mukhaizna’s heavy crude flows to 150,000 barrels per day (bpd) from 10,000bpd, ONA said late on Saturday.

Independent oil producer Oman is determined to reverse its steadily declining crude output and wanted Shell to invest more cash in Mukhaizna’s development, industry sources told Reuters.

Muscat recently turned over the field’s data to Occidental and asked it to provide an alternative development scheme.

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Occidental, already pumping 50,000bpd in the sultanate, has teamed up with Liwa to develop the geologically complex Mukhaizna. The pair have also won exploration blocks in Libya.

Petroleum Development Oman (PDO), the country’s main crude producer, has said average output is expected to drop to 635,000bpd this year from 657,000bpd in 2004.

PDO, majority owned by Oman’s government, plans to inject an annual $1.5 billion to boost rates to 800,000 bpd by 2009.

Shell has long involvement in Oman via PDO, which had been slated to develop Mukhaizna until it was reassigned. Muscat holds 60 per cent in PDO, Shell 34 per cent, France’s Total 4 percent and Partex Oman the remainder.



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