French oil major Total said it has signed a Memorandum of Understanding (MoU) with Oman to develop natural gas resources in Oman
The company and Britain's Shell as the operator will develop natural gas discoveries in the Greater Barik area on onshore Block 6.
Under the agreement between the companies, Total will have a 25 per cent share and Shell will have a 75 per cent share before possible State back-in.
A back-in agreement gives a party the right to receive reversionary interest at a later time, subject to certain conditions.
The back-in clause is used in farmout agreements to convert the overriding royalty interest of a lease-owner, lessee or nonparticipating partner into a working interest upon payout of the well, according to the Schlumberger Oilfield Glossary.
Total and Shell are aiming for an initial gas production of about 500mmcfd and a potential to reach 1bcfd at a later stage.
Total will use the gas it is entitled to, as feedstock for an LNG bunkering service for marine vessels.
“We are pleased to sign this MoU with the Sultanate of Oman that will give us access to new gas resources and the opportunity to develop an integrated gas project,” Arnaud Breuillac, president, exploration & production at Total, said.
“We will bring our expertise in LNG and will introduce access to a new gas market for the Sultanate. Developing an LNG bunkering service will generate in-country value and job opportunities, and will support industry diversification through fostering the shipping activity in Oman,” Breuillac added.
This MoU covers both upstream and downstream businesses.
