Shell (RDS.A) Inks Gas Deal With Oman for Block 10, Saih Rawl

Royal Dutch Shell plc’s (RDS.A) subsidiary Shell Integrated Gas Oman BV and its partners have agreed to develop and produce natural gas from block 10 of the Saih Rawl gas field under a concession agreement with Oman. A separate gas sales agreement for gas generated from the block was also signed by the parties.

RDS.A's partners include OQ and Marsa Liquefied Natural Gas LLC, a joint venture between TotalEnergies and OQ.

According to Oman's energy ministry, the block is estimated to produce 0.5 billion cubic feet of gas per day (bscf/d). Production is likely to commence within a couple of years.

Per the concession agreement, Shell operates block 10 with 53.45% working interest, while OQ and Marsa Liquefied Natural Gas LLC have 13.36% and 33.19% stakes, respectively.

On behalf of the Block 10 venture partners, Petroleum Development Oman (PDO) is constructing the project's infrastructure, including the main pipeline to the Saih Rawl gas processing plant. After the initial phase, the business will drill and connect wells to maintain production.

Additionally, Shell and Energy Development Oman (EDO) agreed to process natural gas from Block 10 at EDO's Saih Rawl plant.

Moreover, RDS.A and the Oman government agreed to explore ideas for a separate downstream gas project wherein Shell might manufacture and sell low-carbon goods and also support growth of hydrogen in the Middle Eastern nation.

Over the last many decades, Shell remained a partner in Oman's growth and success. The firm is active in the oil and gas industry within the country, with joint venture and independent activities ranging from research and development, exploration and production to  trade, retail and alternative energy.

Zacks Rank & Key Picks

Shell currently has a Zack Rank #3 (Hold). Investors interested in the energy  sector might look at the following stocks worth considering with a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Occidental Petroleum Corporation OXY is an integrated oil and gas company with significant exploration and production exposure. OXY is also a producer of various basic chemicals, petrochemicals, polymers and specialty chemicals. As of 2020 end, OXY's preliminary worldwide proved reserves totaled 2.91 billion BOE compared with 3.9 billion BOE at the end of 2019.

In the past year, shares of Occidental Petroleum have surged 99% compared with the industry's growth of 96.6%. OXY's 2021 earnings are expected to soar 151.4% from the year-ago reported figure. OXY has also witnessed eight northward estimate revisions in the past 60 days. In the third quarter, OXY achieved its divestiture target of $10 billion by inking a deal to sell off its interest in two offshore Ghana assets for $750 million.

PDC Energy PDCE is an independent upstream operator dealing in exploration, development and production of natural gas, crude oil and natural gas liquids. PDCE, which reached its present status following the January 2020 merger with SRC Energy, is currently the second-largest producer in the Denver-Julesburg Basin. As of 2020 end, PDC Energy's total estimated proved reserves were 731,073 thousand barrels of oil equivalent.

In the past year, shares of PDC Energy have gained 169% compared with the industry's growth of 108.6%. PDCE's earnings for 2021 are expected to surge 273.4% from the prior-year reported figure. In the past 60 days, the Zacks Consensus Estimate for PDC Energy's 2021 earnings has been raised 26.8%. Earnings of PDCE beat the Zacks Consensus Estimate in all the last four quarters, the average being 51.06%.

Sunoco LP SUN is a master limited partnership engaged in distributing motor fuel to roughly 10,000 customers, including independent dealers, commercial customers, convenience stores and distributors. In the United States, Sunoco is among the largest motor fuel distributors in the wholesale market by volume. In 2020, the partnership sold 7.1 billion gallons of motor fuel.

SUN's earnings for 2021 are expected to surge 743.4% from the prior-year reported number. Sunoco currently has a Zacks Style Score of A for both Value and Growth. For 2021, SUN expects fuel volumes of 7.25-7.75 billion gallons, indicating a rise from the 2020 reported level of 7.09 billion gallons.

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