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Qatar To Invest Heavily In Crude Boost
Qatar, which focused on building LNG trains in the past decade, is now shifting its attention to its oil fields. It is preparing to spend billions of dollars to reverse its decline in crude output, which has slumped to 730,000 b/d, Nick Wilson writes.
State-owned Qatar Petroleum (QP) is preparing to develop further three fields it operates, starting with offshore Bul Hanine, whose production will rise from 45,000 b/d to 90,000 b/d. Next will be onshore Dukhan – whose output has dropped from 300,000 b/d to 230,000 b/d in the past six months due to reservoir management issues, followed by 25,000 b/d offshore Maydan Mahzam.
QP signed supervisory technical service agreements (TSAs) with majors in 2008-09 to appraise the fields and produce development plans for them. Following Total’s development plan, QP is preparing to tender a multi-billion dollar contract for Bul Hanine, French engineering firm Technip, which often works with Total, is expected to win this. The amount is considered to be expensive by industry standards for a production increase of this size, MEES learns, but it shows how seriously Doha is taking the decline. Qatar was extremely sensitive about its production dropping below 800,000 b/d last year. “QP doesn’t have the staff to manage all its projects, and focused on getting the LNG trains on-stream,” an official tells MEES.
Meanwhile, ExxonMobil is very advanced in writing its development plan for Dukhan, but ConocoPhillips is late with its seismic data processing for Maydan Mahzam.
Qatar’s swing producer is the field operated by Denmark’s Maersk al-Shaheen, which produces about 300,000 b/d. The field was originally targeted to reach 525,000 b/d production capacity under Maersk’s production sharing agreement (PSA), which expires in 2017. Doha, however, told Maersk to hold back on boosting capacity while it studied the reservoir to understand where it should plateau output to extend the field’s life. The reservoir has suffered from a pressure drop and sea water entering the reservoir, which in one place is only 1 meter deep. The issues are expected to be resolved soon. And long term Maersk is studying injecting CO2
into what it says is the world’s longest horizontal well, at about 12km. Maersk won the contract after majors said they could only get its production to 20,000 b/d.
US independent Occidental (Oxy) is doing a development plan for Iddi al-Shargi North and South Domes, which it operates. They have a combined production of 95,000 b/d. Its PSA will finish in 2016. Both Oxy and Maersk’s PSAs are expected to be continued.
Qatar’s Oil Fields
Field
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Operator
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Production (b/d)
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Al-Shaheen
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Maersk
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300,000
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Dukhan
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QP
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230,000
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Bul Hanine
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QP
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45,000
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Idd al-Shargi N&S
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Oxy
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90,000
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Rayan
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Oxy
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8,000
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Maydan Mahzam
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QP
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25,000
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El-Bunduq
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BOC
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5,000
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Al-Karkara
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QPD
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5,000
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Al-Khaleej
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Total
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25,000
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Total
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733,000
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Source
: QP and IOCs.
Doha, which has some geopolitical concerns during the time of the Arab Spring – is keen to have companies from militarily powerful countries active in its energy industry. It would also like to involve BP, whose toe-hold in the country is a 3% stake in El-Bunduq offshore field on the UAE/Qatar border, which provides Qatar with 5,000 b/d. But there are no big projects left, leaving only downstream as an opportunity.
In addition to oil field upstream activities, international oil companies (IOCs) are involved in a variety of other projects:
Shell operates Qatar’s $19bn flagship gas to liquids (GTL) Pearl project, aims to build a petrochemical plant and has a 75% stake in exploration Block D, which it shares with PetroChina. It also manages Qatar’s LNG fleet of carriers on behalf of Qatargas Transport Company (Naqilat) and has a 30% stake in the 7.8mn t/y Qatargas 4 LNG train.
Total has a 25% stake in exploration Block BC, a 20% interest in North Field Bravo (NFB) block and operates the 25,000 b/d al-Khaleej field. It also has a 10% interest in the Qatargas 1 LNG plant, a 16.7% stake in Qatargas 2 Train 5, and a 24.5% stake in Dolphin Energy, whose pipeline transports 2bn cfd of Qatari gas to the UAE and Oman. Total is a partner in Ras Laffan’s 146,000 b/d condensate splitter with a 10% stake. It also has equity in Qatar’s petrochemical plants Qapco (20%) and Qatofin (48.6%).
ConocoPhillips
has a 30.0% stake in
the Qatargas 3 LNG plant, and equity in Qatar Chemical Company Ltd (Q-Chem) and Qatar Chemical Company II Ltd.
ExxonMobil is a participant in 12 of Qatar’s LNG projects, and operates Al-Khaleej Phase 1 and Phase 2 and Barzan upstream gas projects in the North Field.
Japan’s Cosmo Oil has a 35% stake in El-Bunduq, a 75% stake in 5,000 b/d al-Karkara field and a 10% stake in Laffan Refinery Company.
© Copyright MEES 2012.
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