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Shell beats French rival to £6.5bn Abu Dhabi gas deal

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By Rob Davies: |

Royal Dutch Shell has pipped French rival Total to a multi-billion-dollar project to develop a difficult gas field with Abu Dhabi’s National Oil Co.

The deal gives the Anglo-Dutch oil supermajor a chance to prove the effectiveness of its latest sour gas treatment technology in a project on the Bab field that has been valued at around $10bn (£6.5bn).

Prime Minister David Cameron, speaking at the start of a visit by UAE president Sheikh Khalifa bin Zayed al-Nahayan, said: ‘Today’s deal, the largest secured by a British company in the UAE in recent years, is a fantastic outcome for Shell and highlights the UK’s world class energy sector.’

The 30-year venture to treat the potentially deadly gases in Bab also puts Europe’s largest energy company in a strong position to renew its role in the UAE’s largest onshore oil concession, on which the Bab field stands, when that contract comes up for renewal early next year.

The news came as British rival BP smashed analysts’ first-quarter profit forecasts thanks to lucrative new oil projects, but revealed a raft of fresh lawsuits from its Gulf of Mexico oil disaster.

The supermajor made a record profit of £10.7bn when including £8bn in cash from the sale of its half-share in Russian joint venture TNK-BP.

Stripping out the sale proceeds – and the impact of price movements on its oil inventories – BP made £2.7bn, below last year’s £3bn figure but ahead of City estimates. Shares jumped 9.65p to 466.4p. Overall production was 5 per cent lower than last year at 2.33bn barrels per day as BP felt the impact of its £18bn sale of 50 per cent of TNK-BP to Kremlin-backed Rosneft.

BP also revealed that it has been slapped with some 2,200 Gulf of Mexico lawsuits since March 6, 2013 as plaintiffs hurried to get their claims in before the three-year window for claims closed on April 20. The new claims are understood to include one from the government of Mexico, as well as previously disclosed claims from Gulf states and local governments for £22bn.

BP, which did not increase its estimate of a £27bn final bill for the 2010 disaster, has described these claims as ‘seriously flawed’.

But it was forced to increase its estimate of a settlement reached last year with one group of plaintiffs by £300m to £5.3bn.

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