Shell, Oxy lead race for UAE sour gas project
Dubai, November 8, 2007
Royal Dutch Shell and US Occidental Petroleum are the front-runners to win a multibillion-dollar project to develop sour gas reserves in the UAE, industry sources said.
The project is one of the biggest this year available to international companies competing for limited access to the Middle East's oil and gas fields.
'Shell and Oxy are still in the race,' said a source. 'They're in a sort of final within a final. It may be one or the other that wins, or they may work together.'
Shell and Oxy have the edge over the other two bidders for the project, US majors Exxon Mobil and ConocoPhillips, sources said. The four companies submitted bids to state-run Abu Dhabi National Oil Company (Adnoc) in August.
Adnoc was expected to decide on the winner of the project by the end of the year, a source at an oil major said.
Adnoc officials contacted by Reuters declined to comment.
Once a winner is selected for the project, Adnoc was expected to move ahead quickly as it needs to bring online new gas supplies to meet spiralling domestic demand.
Record oil revenues have fuelled economic expansion and boosted demand for gas from the power sector and heavy industry in the UAE.
The winner will take a 40 per cent stake in the project, while Adnoc will hold the rest.
The bidding round was the second for the sour gas reserves after the UAE revised the terms of its initial tender in April that also included the Bab field.
The project to develop both fields had an estimated cost of around $10 billion. It is not clear what the cost of developing the Shah field alone will be.
The complexity of developing both fields led Abu Dhabi to split the tender. The UAE has said the Bab field would be developed later.
The UAE holds the world's fifth-largest gas reserves at nearly 214 trillion cubic feet and is the world's sixth-largest oil exporter.
The gas has a content of around 30 percent of potentially deadly hydrogen sulphide, making it tougher to produce than conventional gas reserves. Reuters
More Energy, Oil & Gas Stories
- Egypt will get oil aid from Arab states
- New technology for Bahrain's gas industry to save $300m
- Innovations key focus at Geoscience expo
- Iran seals gas export deal with Oman
- Total unit inks Elf Lubricants agreement
- Opec raises forecast for 2014 global oil demand
- Mitsui joins DME as trading member
- GE Power Conversion wins major SEC order
- Basra Light crude exports to rebound in April
- Aramco to produce unconventional gas for projects
- Alstom opens smart grid centre in Dubai
- Experts discuss key geosciences issues
- Egypt to permit factories to use coal for energy
- ME oil, gas transaction value up 15pc
- Victrex to showcase new product in Paris
- Aramco JV puts off giant refinery overhaul to 2015
- Libya threatens to bomb N Korean tanker
- Bahrain 'producing 850MW of surplus power'
- 2,000 experts for Bahrain geosciences summit
- Libyan rebels start oil exports, bypassing govt
- Dubai drilling company set for London IPO
- Opec output soars on higher Iraq exports
- S Korea to pay Iran $550m under nuke deal
- Qatar LPG exports will stay unchanged till 2018
- $14bn Bahrain energy sector focus for summit
- Iraq now world's fastest-growing oil exporter
- Old IT systems pose risk to oil firms
- Thomson Reuters adds commodity monitoring tool
- Oil below $90 to hit GCC economies
- GlassPoint appoints new Oman director