Big Oil bids for giant UAE gas project

By Simon Webb

DUBAI (Reuters) - At least five international energy companies submitted bids on Sunday for a giant sour gas project in the United Arab Emirates that could be have a price tag as high as $10 billion.

The project is one of the largest open to oil and gas companies competing for limited access to the Middle East's energy reserves. Saudi Arabia keeps the world's biggest oil reserves closed to international firms, while gas exporter Qatar has a moratorium on new projects.

"This is the largest gas development in the region in terms of gross production," said Colin Lothian, senior analyst for the Middle East at global consultancy Wood Mackenzie.

"It is also one of the biggest projects available for participation of international companies. The successful bidder will look forward to a long-term role in the future of Abu Dhabi's gas development."

BP (BP.L: Quote, Profile, Research, Stock Buzz) and Royal Dutch Shell (RDSa.L: Quote, Profile, Research, Stock Buzz) said on Sunday, the last day for submission, that they had bid. France's Total (TOTF.PA: Quote, Profile, Research, Stock Buzz), ConocoPhillips (COP.N: Quote, Profile, Research, Stock Buzz) and the U.S.'s Occidental Petroleum Corp. (OXY.N: Quote, Profile, Research, Stock Buzz) were also in the running, industry sources said.

ADNOC had invited bids from several other companies including BG Group (BG.L: Quote, Profile, Research, Stock Buzz), Chevron (CVX.N: Quote, Profile, Research, Stock Buzz), Eni (ENI.MI: Quote, Profile, Research, Stock Buzz), Exxon Mobil (XOM.N: Quote, Profile, Research, Stock Buzz), Japan Oil Development Co, and German chemical company BASF BF.N subsidiary Wintershall. It was unclear on Sunday which of these companies had bid.

The winner would take a 40 percent stake in the project, with state-run Abu Dhabi National Oil Company (ADNOC) taking the rest. The project was expected to have gross gas production of around 3 billion cubic feet per day and analysts estimate investment in the project could total $10 billion.

The sour gas in the UAE's Shah and Bab fields, with a content of around 30 percent of deadly hydrogen sulphide, is tougher to produce than sweeter gas reserves.