Shell has decided to withdraw from negotiations on the development of a petrochemicals plant in Basra, Iraq, reported Reuters.  

The move highlights a shift in the UK oil and gas major’s strategy against a backdrop of declining profits in the sector.  

In 2015, Shell signed a preliminary agreement for the $11bn (£8.76bn) Nebras Petrochemical Project, which aimed to position Iraq as a major petrochemical producer in the Middle East. 

Iraq's Ministry of Oil said that Shell would not proceed with discussions involving the Ministry of Industry and Minerals and the Ministry of Oil about its investment in the Nebras Petrochemical Project.  

The project, once estimated to come online within six years of the agreement, faced setbacks due to financial and contractual disagreements, leading to Shell's eventual withdrawal from the deal. 

Separately, a Shell spokesperson said: "After in-depth evaluation on the feasibility of the Nebras integrated petrochemicals complex with our government partners, Shell has decided not to proceed with the project. 

"Shell will continue to play a vital role in Iraq's energy landscape through our partnership in the Basra Gas Company (BGC) joint venture as the main gas processing entity in Iraq."  

The development comes as Shell actively seeks buyers for its oil refining and petrochemicals assets in Singapore.  

The company has reportedly shortlisted at least four potential buyers including energy trader Vitol, China National Offshore Oil Corporation (CNOOC), and Chinese chemical companies Eversun Holdings and Befar Group.  

Shell has requested formal bids from these entities by the end of February 2024. 

Last month, Shell announced its plan to close its oil refinery in Wesseling, Germany, by 2025.  

The site is set to be transformed into a facility dedicated to producing lubricant feedstock, indicating a pivot in the company's operational focus.