Despite a busy week in…
The SPR oil sale is…
The Qataris are putting their Shaheen oilfield up for tender, leaving Denmark’s AP Moller-Maersk—the operator of the field since 1992—out in the cold and prompting the company to finally concede that it may lose this concession.
Al Shaheen is Qatar’s largest oil field, with an estimated daily output of 300,000 barrels a day, accounting for some 40 percent of the country’s total daily oil production, but the production contract with Qatar expires next year.
Last year, Qatar launched a tender for the oilfield, which was an unexpected move for Maersk; but only now is the Danish company conceding that it risks losing the tender process, and losing the field.
Related: Why Oil Prices Will Likely Drop Below $40 Soon
At the time, Qatar Petroleum president and CEO Saad Sherida Al-Kaabi explained the move as the country’s desire to seek out the best technological solutions for the field’s development combined with the best financial return to the state. It was a thinly veiled snub.
The bottom line, according to the Qataris, is apparently that they want to increase daily output in this field to 500,000 bpd, and Maersk may not be able to do this.
Officially, Maersk CEO Nils Smedegaard Andersen has conceded the agreement may not be renewed next year.
Related: A 4.5-Million-Barrel Per Day Oil Shortage Looms: Wood Mackenzie
"On Qatar, yes, we are in a tender process. That means, that there is a risk that we will lose Qatar but we don't feel that that should induce us to go out and do something dramatic on the M&A activity to replace volumes," Andersen told investors.
He also added Qatar may announce the result of the tender in the second half of this year.
Analysts pointed out Qatar Petroleum’s announcement to invite international companies to compete against Maersk in a tender mirrored the Danish’s inability to negotiate an extension of the contract behind closed doors.
Exxon Mobil and Royal Dutch Shell are said to have joined the completion, along French Total SA.
By James Burgess of Oilprice.com
More Top Reads From Oilprice.com:
James Burgess studied Business Management at the University of Nottingham. He has worked in property development, chartered surveying, marketing, law, and accounts. He has also…