March 5, 2018 / 3:36 PM / 4 months ago

Shell gives up on Gaza's offshore gas field - Palestinians

GAZA (Reuters) - Royal Dutch Shell is giving up its stake in an undeveloped natural gas field off the Gaza Strip, sending the Palestinians looking for a new foreign group to replace it, Palestinian officials said on Monday.

FILE PHOTO: Filled oil drums are seen at Royal Dutch Shell Plc's lubricants blending plant in the town of Torzhok, north-west of Tver, November 7, 2014. REUTERS/Sergei Karpukhin/File Photo

Cabinet ministers from the Palestinian Authority said in a statement they had been informed that the energy giant was pulling out of the project and were now in the process of “trying to attract a global company” to take its place.

Shell had been struggling to find a buyer for its 55 percent stake in the Gaza Marine field, which it took over during its acquisition of BG Group in 2016.

A Shell spokesman said: “We confirm we have been in discussions with various parties about the future of the Gaza Marine project. As of now, Shell continues to holds its equity in the Gaza Marine asset.”

Gaza Marine, located about 30 km (20 miles) off the Gaza coast, has long been seen as a golden opportunity for the cash-strapped Palestinian Authority to join the Mediterranean gas bonanza, providing a major source of income to reduce its reliance on foreign aid.

Plans to develop the field - estimated to hold over 1 trillion cubic feet of natural gas, the equivalent of Spain’s consumption in 2016 - were put off several times over the past decade.

The delays were due to internal Palestinian rivalry and conflict with Israel, as well as economic reasons.

With Shell’s exit, the Palestine Investment Fund, a sovereign wealth fund, remains the sole stakeholder.

A Palestinian official familiar with the matter, who spoke on condition of anonymity, told Reuters that once a potential buyer is located they will discuss options of how much control of the project could be acquired.

Additional reporting by Ali Sawafta; Writing by Nidal Almughrabi; Editing by Adrian Croft

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