Omar Suwaina, onshore division manager for exploration and production at Adnoc, tells MEED an award is imminent.

As the race to win the concession to develop the sour gas reserves reaches an end, politics rather than technical ability appears to be the deciding factor.

Supporters of the two front-running international oil companies for the deal – the UK/Dutch Shell Group and the US’ Occidental Petroleum – have been pushing their cases to Adnoc and the Abu Dhabi government.

Shell’s supporters argue that it would be the best technical choice, having conducted all the initial engineering and conceptual work on Abu Dhabi’s sour gas potential.

“Shah has always been seen as Shell’s to lose, because of all the bidding IOCs [international oil companies], it knows the field best,” says an IOC executive.

Occidental’s case is supported by a faction within Adnoc that wants ‘fresh blood’ in the emirate’s upstream sector.

Of the four shortlisted IOCs for the contract – Occidental, Shell, the US’ ExxonMobil Corporation and ConocoPhillips – only Occidental has yet to obtain an upstream equity interest.

Additionally, the firm is understood to have the support of Abu Dhabi’s Mubadala Development Company, with which it has partnered on the Dolphin pipeline bringing Qatari gas to the UAE and in upstream ventures in Libya, Qatar and Oman.

US diplomatic efforts are also strongly behind Occidental’s bid.

“Both Occidental and Shell, indeed all four shortlisted firms, are more than capable of taking on the project,” says another oil executive. “It is now a matter of who can make the best argument, and who is making it.”

While Exxon and Conoco seem to be out of the running, they should not be completely discounted as their bids are still being worked on, according to industry sources. One source close to the project says that Conoco is actually in a better position than Occidental. “If the right proposal and argument is made, Conoco could well clinch the deal too,” says the source.

The project covers the long-term production of more than 1 billion cubic feet a day of sour gas from the field. The sour gas is likely to be used for injection purposes.

The surface portion of the scheme covers a gas gathering system to collect the wellstream fluids, a gas processing facility including treating and sulphur recovery facilities, and a sulphur management system.
The US’ Fluor Corporation is the front-end engineering and design contractor and Australia’s WorleyParsons is the project management consultant.

The development of its substantial sour gas reserves is a key tenet of Abu Dhabi’s policy to ensure there is enough gas supply to meet its growing power generation requirements (MEED 16:11:07).