Qatar’s giant Al Shaheen offshore oil field, with a production capacity of 300,000 barrels per day, will be jointly developed and operated by a new 70:30 joint venture of Qatar Petroleum (QP) and Total from 2017.
In this regard, ‘North Oil Company; has been established, where the partners will invest more than $2bn during 2017-22 to further develop Al Shaheen, which is located in Qatari waters 80 km North of Ras Laffan. Beginning production in 1994, the existing development consists of 30 platforms and 300 wells.
QP president and chief executive Saad Sherida al-Kaabi and Total chairman and chief executive Patrick Pouyanné last night signed agreements in the presence of HE the Prime Minister and Interior Minister Sheikh Abdullah bin Nasser bin Khalifa al-Thani.
Presently Maersk Oil and Gas is the operator of the field and the current 25 year production sharing agreement expires on July 13, 2017. In the past 24 years Maersk and QP have together developed Al Shaheen into Qatar’s largest off-shore producing oil field which now accounts for about 40% of Qatar’s total oil production.
A development and fiscal agreement was also signed, in which QP licensed the rights for the development and operation of the field, and for the production, sale and export of crude oil from Al-Shaheen oil field for a period of 25 years starting from July 14, 2017.
“QP’s objective for the competitive process was to choose a partner that has world class technical capabilities that enable it to continue the development and operation of Al-Shaheen Field in partnership with QP, while at the same time ensuring the highest possible financial return to Qatar,” al-Kaabi said, adding the production will be maintained at 300,000 barrels per day at present.
The strong and serious technical and financial offers it had received during an industry downturn are a true testament to Qatar’s attractiveness reflected by its natural resources and safe investment climate, he said.
“Total is honored to have been awarded a 30% interest in the Al-Shaheen concession. This is an important recognition of Total’s technical and commercial competence, and the group will deploy its best technical expertise and experienced teams to this field,” said Pouyanné.
This agreement is in line with strategy of Total, which is in Qatar for the last 80 years, to reinforce its presence in the Middle East, in particular by accessing giant fields and by complementing its portfolio with low-technical cost oil assets, he added.
Total holds a 20% interest in the upstream part of Qatargas 1; 10% in the Qatargas 1 liquefaction plant joint venture; 24.5% in the Dolphin Energy and a 16.7% in the Qatargas 2 Train 5 joint venture. Total’s Qatari production averaged 134,000 barrels of oil equivalent per day in 2015.
Total is also a partner in the Laffan Refinery with a 10% interest and in the Qapco (20%) and Qatofin (48.6%) petrochemical plants.
QP to absorb Al Shaheen Oil Field employees
Qatar Petroleum (QP) assured employees in Al Shaheen Oil Field that their employment is not at risk though a new joint venture will operate and manage it, following the expiry of the present contract with Maersk Oil in 2017.
Moreover, Qatar’s investments related to exploration and production of natural resources will continue unhindered, Qatar Petroleum president and chief executive Saad Sherida al-Kaabi said last night, after inking pact with Total for the offshore Al Shaheen oil field.
“A signed letter will sent (in an hour) across to all employees (in Al Shaheen) that their jobs are guaranteed,” al-Kaabi said, adding a transition team will take over in order to ensure seamless integration with the new dispensation, which will start operations from July 14, 2017.
At a town hall meeting, he had early this year hinted at providing ‘continuity of service to the people’ who are contributing to the successful operations of its Al Shaheen project, which will be operated and managed by North Oil Company, a 70:30 joint venture between QP and Total from 2017.
Al-Kaabi also asserted that QP has not curtailed investments related to exploration and production and the cost optimisation is taking place only in those areas, which are outside of it.