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Reuters: Shell says Oman Mukhaizna stake to drop to 17 pct

Reuters: Shell says Oman Mukhaizna stake to drop to 17 pct

Wednesday 22 June 2005

LONDON (Reuters) – Royal Dutch/Shell group said on Tuesday it was to get a 17 percent stake in a new production sharing agreement covering Oman’s Mukhaizna oilfield, compared to the 34 percent it currently holds.

U.S. oil firm Occidental (OXY.N: Quote, Profile, Research) will receive a 45 percent stake under the terms of the new deal which has been agreed in principle and be named project operator, a Shell spokesman said.

France’s Total (TOTF.PA: Quote, Profile, Research) will receive 2 percent, down from its current 4 percent. State-owned Oman Oil Company will hold 20 percent. The United Arab Emirates’s Liwa Energy will have 15 percent and Partex Oman will own 1 percent.

The Shell spokesman said the new plan to develop Mukhaizna aimed to boost production to 150,000 barrels of oil per day from 10,000 bpd by using complex techniques to exact more of the heavy oil in the field.

Oman’s appointment of Occidental to the lead role in the project is an embarrassment for Shell, which is struggling with one of the worst reserve replacement ratios in the industry.

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