THE WALL STREET JOURNAL: Shell Exec:Oman Gvt In Talks With Occidental On Oil Field; “It could mean Shell losing its rights to develop the field, despite signing a deal with Oman to exploit its oil deposits for the next 40 years. A spokesman for Shell later confirmed that the talks concerned the right to develop the Mukhaizna field, which potentially holds 2.4 billion barrels of oil” (ShellNews.net) 28 April 05

DOW JONES NEWSWIRES

April 28, 2005

LONDON -- The Omani government is in talks with Occidental Petroleum Corp (OXY) regarding a licence for an oil field where Royal Dutch/Shell Group (RD, SC) is a shareholder, Shell's Chief Financial Officer Peter Voser said Thursday in a conference call.

Voser was referring to a part of Oman's Block Six, which is operated by Petroleum Development Oman. PDO is 60%-owned by the government and 34% by Shell, which is the technical adviser on the project. Total SA (TOT) holds 4% and Partex Oman Corp. holds 2%.

Speaking in a press conference call, the chief financial officer said the shareholders of PDO are "considering alternative options" to the current operating situation.

It could mean Shell losing its rights to develop the field, despite signing a deal with Oman to exploit its oil deposits for the next 40 years.

A spokesman for Shell later confirmed that the talks concerned the right to develop the Mukhaizna field, which potentially holds 2.4 billion barrels of oil. If a deal with Occidental is clinched, the field could come under the operatorship of Occidental, he said.

In that case, the U.S. oil company would be granted a new oil recovery project to extract heavy crude from the field, which has an output of 10,000 barrels a day, the spokesman added.

A person familiar with Shell 's Omani business said that Occidental would likely take a stake in the field as part of the deal.

Occidental couldn't be reached for comment.

The Shell spokesman confirmed a report that said the Omani government had asked Shell to give up areas of Block Six.

He said a "schedule of relinquishment is standard practise" and was part of the December agreement that renewed its contract for 40 years.

The person familiar with Shell 's Omani business said that Shell may be forced to give up 10% of its acreage in Oman on July 1.

Company Web site: http://www.shell.com

-By Benoit Faucon, Dow Jones Newswires; +44-20-7842-9266; benoit.faucon@dowjones.com 

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