LONDON (Alliance News) - Royal Dutch Shell PLC Monday said it has decided to exit the joint development of the Bab sour gas reservoirs with ADNOC in the emirate of Abu Dhabi, and to stop further joint work on the project.
The oil and gas giant, which is hoping to complete a merger with BG Group PLC within the next few weeks, said it made the decision to exit the joint venture following "a careful and thorough evaluation of technical challenges and costs".
"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," said Shell.
Shell was selected by ADNOC, otherwise known as the Abu Dhabi National Oil Co, back in 2013 as the pair looked to develop one of the largest gas fields in Abu Dhabi. Although the size was enticing, the reservoirs were thought to be challenging because of its high concentration of hydrogen sulfide and carbon dioxide.
The joint venture was expected to last for three decades, and media reported at the time that ADNOC short-listed Shell for the USD10.00 billion deal to develop the reservoirs. Once developed, the field was expected to produce around 500.0 million cubic feet of gas per day.
Shell 'A' shares were trading up 1.1% to 1,366.0 pence on Monday.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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