Adnoc Selects Shell to Operate Bab Gas Field

DUBAI - State-run Abu Dhabi National Oil Co., or Adnoc, has selected Royal Dutch Shell PLC to operate the strategically important Bab sour-gas field, the International Oil Daily reported Tuesday, citing industry sources.

The company had shortlisted Shell and French major Total SA for the estimated $10 billion deal, but Shell won the bid, according to the report in the daily, which is run by Energy Intelligence Group.

Both Shell and Total had put forward competitive offers, but the main difference was their approach in handling the massive amounts of sulfur produced at the field.

The Bab field, once developed, will produce 500 million-800 million cubic feet of gas per day, but expertise is required to handle the large amounts of sulfur generated from the estimated 15% hydrogen sulfide content of the gas.

Shell recommended exporting the sulfur, while Total submitted a proposal to reinject the sulfur back into the reservoir, the report said.

The deal needs to be signed off by the emirate's highest oil authority, the Supreme Petroleum Council--which includes the most senior leaders in the emirate--according to the report.

Shell declined comment when contacted by Dow Jones Newswires.

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