By OGJ editors
HOUSTON, Jan. 20 -- Occidental Petroleum Corp. said the government of Abu Dhabi approves its plans to take a 40% participating interest in Shah sour gas field under a 30-year contract. The Abu Dhabi National Oil Co. (ADNOC) holds the remaining interest.
ConocoPhillips on Apr. 28, 2010, announced plans to withdraw from a joint venture with ADNOC to develop Shah field. The withdrawal came as part of ConocoPhillips’ previously announced strategy to trim global operations (OGJ, Nov. 16, 2009, p. 68). ConocoPhillips had a 40% interest in Shah field.
Ray R. Irani, Occidental's chairman and chief executive officer, said, “This is another important step in the implementation of our growth strategy and in our relationship with the Emirate of Abu Dhabi. “
Shah field contains high-sulfur gas reservoirs 110 miles southwest of Abu Dhabi City. The project will involve construction of several gas gathering systems, new gas and liquid pipelines, and processing trains. The development is expected to produce significant amounts of condensate and NGL.
ADNOC has started developing the field with the majority of project engineering procurement and construction contracts already awarded. Production from the field is scheduled to come on stream in 2014. Project costs are estimated at $10 billion.
Previously, ConocoPhillips and ADNOC had formed a company to drill 20 wells and build infrastructure for production of about 1 bscfd of raw gas yielding 1.6 million tonnes/year of NGL, 30,000-40,000 b/d of condensate, 3.4 million tonnes/year of sulfur, and 500-600 MMscfd of dry gas (OGJ, Nov. 16, 2009, p. 33).