Royal Dutch Shell today said that it's had to exit the multi-billion dollar natural gas project in Abu Dhabi, as it attempts to manage costs in today's low oil price environment.
Oil prices skidded to a 2003-low today, after the lifting of Western sanctions on Iran. The 18-month rout has forced oil companies to delay, and even abandon, a number of projects in order to stay afloat.
Shell said "technical challenges and costs" means it'll stop working on the Bab sour-gas field with state-run Abu Dhabi National Oil Co (ADNOC).
"The evaluation concluded that for Shell, the development of the project does not fit with the company's strategy, particularly in the economic climate prevailing in the energy industry," the company said in a statement.
It comes months after the company was forced to halt construction on its Carmon Creek thermal oil sands project in northern Alberta, Canada.
Shell has been attracting attention ahead of its £36bn mega-deal with smaller rival BG Group, which goes to a shareholder vote at the end of this month. While Shell previously it would work with oil prices in the low $60s, Brent crude has fallen below the $28 per barrel mark yesterday.
The company's rose as much as 1.5 per cent to 1371.61p per share, before reversing gains to settle at 1339p this afternoon.
Shell won the tender, which was then valued at $10bn, to develop over a 30-year venture the Bab sour gas field back in in 2013.
It would've had a 40 per cent stake, while ADNOC was expected to hold 60 per cent.