Abu Dhabi seeks partners to develop Shah gas project

US major ConocoPhillips withdrew from the $10 billion gas project in April
Abu Dhabi seeks partners to develop Shah gas project
NEW PARTNER: UAE is looking for another international partner to help execute the complex Shah gas project(ITP Images)
By Reuters
Mon 01 Nov 2010 07:09 PM

Abu Dhabi National Oil Company (ADNOC) is holding talks with one or more partners to develop the $10 billion Shah gas project after US major ConocoPhillips withdrew, the head of an ADNOC unit said on Monday.

Mohammed A Sahoo, chief executive of Abu Dhabi Gas Industries (Gasco), told Reuters: "We are in talks to have a partner or many partners for this project, I never said that we shortlisted three companies."

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 UAE 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.

Abdulla Nasser al Suwaidi, deputy chief executive of ADNOC: "There is no timeline. It is not an urgent matter."

Royal Dutch Shell, Exxon Mobil and Occidental have shown interest in the project, an ADNOC executive told Reuters.

He said: "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."

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.

The ADNOC executive said: "Shell does have an advantage."

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. (Reuters)

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