An Iranian delegation is scheduled tovisit the sultanate next week to continue talks on exporting gas from thecountry to the sultanate - as Oman also begins studies on evaluating anddeveloping its potential shale-gas reserves.
Speaking to reporters on the sidelines ofthe Gas Arabia Summit, H E Khalifa al Hinai, advisor to the Ministry of Oil andGas, said discussions with the Iranian delegation will focus on price, but noformal agreements will be reached.
H E Hinai added that volumes for naturalgas and LNG operations as well as pricing structures have also yet to bedecided and "are still under discussion."
He said, "We have an Iranian delegationcoming in hopefully by the beginning of next week, so we are still indiscussions. I think an agreement is still some distance away, but it willdepend on the price."
The comments come as news reports fromIran said the country is looking to increase gas swaps with neighbours, withthe Gulf as a key focus.
H E Hinai said that studies have begun onassessing and harnessing the potential of shale gas in the sultanate, after theUnited States reported yielding high volumes of gas through the frackingprocess in its fields.
"It is mostly in the PDO areas, but wehave all these basins with all the oil deposits and we believe it is belowthese areas that we have shale gas. At the moment we are really not drilling,it is just a study."
He added that it will be up to thecompanies carrying out the studies, like PDO, and not the government to decidewhether to go ahead with shale-gas extraction following the completion of thestudies.
However, H E Hinai said that theenvironmental concerns, which have caused the French authorities to place amoratorium on shale-gas extraction following reports of earthquakes andwater-table pollution, are yet to be fully investigated.
He said, "Extraction of hydrocarbons overa long period of time naturally results in subsidence in any field, but we havenot recorded any seismic activity."
H E Hinai added that five new concessionagreements are expected to be awarded for onshore blocks in the first quarterof next year.
He said, "Companies are expected tosubmit their proposals in the first quarter of next year. They take typicallytwo months to analyse, so we expect to award them in the first quarter of nextyear."
© Muscat Daily 2011
