January 18, 2016 / 12:08 PM / 4 years ago

UPDATE 1-Shell ditches major Abu Dhabi gas field project

(Repeats to additional subscribers, amends story tag)

By Ron Bousso

LONDON, Jan 18 (Reuters) - Royal Dutch Shell said on Monday it had decided to exit the multi-billion dollar plan to jointly develop the Bab sour gas field in Abu Dhabi, citing the downturn in the oil market.

The Anglo-Dutch company said that “following a careful and thorough evaluation of technical challenges and costs” it will stop further joint work on the project with the Abu Dhabi National Oil Co. (ADNOC).

Shell won in 2013 a tender that was valued at the time at $10 billion to develop over a 30-year venture the complex sour gas field that involves treating potentially deadly gasses.

The joint venture was also seen at the time as a stepping stone for Shell to renew a coveted concession to develop the United Arab Emirates’ largest onshore oil field.

The Bab sour joint venture envisaged the construction of a 1 billion cubic feet sour gas processing plant for domestic market consumption.

“The evaluation concluded that for Shell, the development of the project does not fit with the company’s strategy, particularly in the economic climate prevailing in the energy industry,” Shell said in a statement on Monday.

ADNOC was expected to hold 60 percent of the Bab sour gas project, while Shell would have held 40 percent.

Shell shares were up 1.2 percent at 1136 GMT, compared with a 1.6 gain for the broader sector index.

Additional reporting by Rania El Gamel

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below