Shell pulls out of Block-D license after dry well

Royal Dutch Shell has abandoned plans to explore for gas in Qatar’s Block D after recent drilling failed to turn up commercial volumes at its majority-owned QSD-1 well. Shell said earlier that it had wrapped up activity at the well after the negative result, while adding that it remained committed to future plans in Qatar.

Shell’s exit from the 8,089 square-kilometre license area may also disappoint Qatar Petroleum, which was to be the off-taker of any gas produced.

Part of the Block D concession extends beneath Qatar’s prized North Field, the world’s biggest gas field that feeds giant liquefaction trains. Qatar is the world’s top LNG exporter.

Earlier, Shell said its Block-D exploratory well “reached total depth as planned; however, it did not encounter commercial volumes of hydrocarbons”.

The gas-rich Gulf country has been a major source of production growth at Shell for over three years, since the major invested $20 billion to build one of the world’s biggest liquefied natural gas (LNG) export plants as well as a cutting edge gas-to-liquids facility.

The QSD-1 project is 75 percent owned by Shell and 25 percent by PetroChina.