On Behalf of 

The company, which would have been a 40 per cent stakeholder in a Shah joint venture with state-owned Abu Dhabi National Oil Company (Adnoc), didn't give an explanation for the decision in a statement yesterday announcing its exit. Adnoc will go ahead with the $10 billion (Dh36.7 billion) project, said a person who asked not to be identified because the decision hadn't been made public.

Dropping out

ConocoPhillips, which announced plans in October to sell $10 billion in assets to cut debt, said April 21 that it would drop out of the Yanbu refinery development with Saudi Arabia's state oil company. The company said then that Yanbu didn't fit with its strategy of scaling back its presence in refining and tightening its focus on oil exploration.

"It would appear that they're rethinking where they stand in the gas markets at this point in time," said James Halloran, a consultant at Financial America Securities in Cleveland. "I think they look at themselves as possibly trying to be oilier, which is the key thing these days." Oil has outperformed gas in US futures trading this year and last. Crude also is more than three times as valuable as gas, relative to the energy content of both commodities, according to a Bloomberg calcluation.

Boosting production

Oil-exporting nations such as the UAE are seeking to boost production of natural gas to fuel domestic power generation and factories. The UAE imports gas from Qatar and is developing nuclear power plants to meet energy demand, which is expected to double by 2020, according to government studies.

Abu Dhabi chose Conoco-Phillips for the Shah project after considering bids from companies such as Exxon Mobil Corporation, Royal Dutch Shell Plc and Occidental Petroleum.

Shell, which was keen to work on the venture at the time, is less interested now, Chief Financial Officer Simon Henry told investors in a conference call.

Business & Finance Club - Dubai - Oil & Gas: Conoco-Phillips, the third-biggest US oil company, pulled out of a Middle East project for the second time in a week, saying it decided against the Shah Gas Field development with Abu Dhabi.