Abu Dhabi seeks partners to develop Shah gas project
ConocoPhillips pulled out of the project in April.
November 2, 2010 9:59 by Reuters
Abu Dhabi National Oil Company (ADNOC) is holding talks with one or more partners to develop the $10 billion Shah gas project after U.S. major ConocoPhillips withdrew, the head of an ADNOC unit said on Monday.
“We are in talks to have a partner or many partners for this project, I never said that we shortlisted three companies,” Mohammed A. Sahoo, chief executive of Abu Dhabi Gas Industries (Gasco), told Reuters.
Sahoo was speaking on the sidelines of an industry event in Abu Dhabi in response to media reports that three international oil companies had been shortlisted.
Conoco pulled out of the project in April, part of its global strategy change to focus on oil and gas exploration and production and move away from refining and processing.
The Shah project is to produce gas, but it also requires multi-billion dollar investment in gas processing facilities of the type that Conoco wants to avoid.
The United Arab Emirates has said that it will proceed regardless of Conoco’s exit, but that it was looking for another international partner to help execute the complex project.
However, officials said they were in no rush to select a partner. “There is no timeline. It is not an urgent matter,” said Abdulla Nasser al-Suwaidi, deputy chief executive of ADNOC.
Royal Dutch Shell , Exxon Mobil and Occidental have shown interest in the project, an ADNOC executive told Reuters.
“But this doesn’t mean that a fourth company cannot come along, talks are still ongoing and the drilling will start soon, no partners are needed for the drilling,” he said.
Shell was seen as the favourite for the deal until just weeks before Conoco won in February 2008, as the Anglo-Dutch firm had carried out extensive studies at Shah and has played a part in gas production in the UAE for over 30 years.
“Shell does have an advantage,” said the ADNOC executive.
Shell is a 15 percent shareholder in state-run Gasco, which holds the concession to produce and process natural gas in the UAE’s onshore fields.
(Reporting by Amena Bakr, Humyra Pamuk and Stanley Carvalho)