Occidental will take a 45 per cent stake in the venture, with Oman Oil Companyholding 20 per cent, Oman Shell Exploration & Productionowning 17 per cent, Liwa Petroleum, part of Abu Dhabi-government-owned Mubadala Development Company, having 15 per cent and France's Total and Partex Oman- both minority shareholders in PDO - taking 2 per cent and 1 per cent.

The new operating consortium will be responsible for raising production to about 150,000 barrels a day (b/d) from 10,000 b/d by 2011.

'Shell has lots of experience in the kind of work required at Mukhaizna and we are still very keen to support the government in developing the field,' says a Shell spokesman. 'Everyone portrayed the change of ownership as a bloody nose for Shell, but this is a very large project, which has grown in size, and another way of looking at it would be to see it as a means of sharing the risk.'

PDO is also due to relinquish imminently other acreage as one of the requirements of the renewal of its concession agreement in December, with an international bid round to be launched. 'This has taken place at intervals throughout the duration of the concession, the last time in 1995, and the decision on which acreage will be relinquished will be taken collaboratively with the government,' the spokesman adds.