Abu Dhabi Picks Oxy for Big Project

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Occidental Petroleum Corp. on Thursday said that it won the right to jointly develop a tricky and expensive natural gas field project in the United Arab Emirates.

The 30-year deal gives the Los Angeles oil developer a 40 percent interest in the Shah sour gas field outside Abu Dhabi. Abu Dhabi National Oil Co., which is owned by the government, controls the remaining stake. Bringing the project online is expected to cost $10 billion and require the installation of complicated gas gathering systems, Occidental said.

The Shah field is about 110 miles southwest of the capital city. It contains what is called sour gas, which is more dangerous and costly to produce because it contains high levels of toxic hydrogen sulfide. Houston-based ConocoPhillips was Abu Dhabi’s original partner on the project but backed out last year. Production of natural gas is scheduled to begin in 2014.

“This is another important step in the implementation of our growth strategy and in our relationship with the Emirate of Abu Dhabi,” Chief Executive Ray Irani said in a statement. “Production at the Shah field will be an important future resource to fill the rapidly expanding regional demand for gas.”

Occidental shares were down $2.14, or 2 percent, to $96.13 in midday trading on the New York Stock Exchange.

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