Oil major Shell said it will exit the joint development of the Bab sour gas reservoirs with ADNOC in Abu Dhabi.
The company said it will also stop further joint work on the project.
Located 150 kilometers southwest of Abu Dhabi, Bab is one of the largest gas field in Abu Dhabi.
Shell said that after evaluation of the project, it concluded the development of the project does not fit in with the company’s overall strategy.
A statement added the decision was made with particular in consideration of the “economic climate prevailing” within the energy industry.
The project, which the second sour gas scheme in Abu Dhabi, will add more than 500 million standard cubic feet (scuf) of gas to the country’s supplies.
Shell originally won the $10billion deal to develop Bab in 2013.
The project was part of a five-year investment cycle into Abu Dhabi’s oil and gas sector worth $40billion. More than half – about $25billion – was ringfenced for developing gas resources.
The gas in Bab’s reservoirs is even more sour than the Shah development, making it more technically challenging and increasing the risk associated with highly toxic sulphur.
The move comes after Shell boss Ben van Beurden said he was optimistic that shareholders will overwhelmingly back its mega-merger with rival BG Group.
His comments come as investors mull the final case put out by both oil giants later this month.
The deal, worth £34billion, is set to create the western world’s largest oil and gas company.
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