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Debt Destroys A Shale Giant

Debt Destroys A Shale Giant

Chesapeake has finally succumb to…

Total Gains 30% Stake in Major Qatari Offshore Field

The Qatari oil ministry has awarded Total a 30 percent stake in a new joint venture contract for the Al-Shaheen offshore field, which produces 300,000 barrels per day.

The state-owned company Qatar Petroleum will retain a 70 percent stake in the operation located 50 miles off the coast of the Gulf country, according to Argus Media.

The French company will replace Maersk's role in the field after the Qatari government’s 25-year contract with the Danish firm expires next year.

Maersk Oil Qatar, which is a subsidiary of Denmark’s A.P Moller-Maersk, said early last month that though it is involved in the tender process, it could possibly lose its right to run its largest oil-producing field.

"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," CEO Nils Smedegaard Andersen told investors.

The company had expected that Qatar would renew its 25-year production agreement, but the government announced the tender last year as a surprise to the firm’s leadership.

Related: Russia-German Pipeline May Break Europe’s Energy Union

A source in Qatar’s oil sector said the government issued the tender because it aspired to increase the field’s output to 500,000 barrels per day.

Al Shaheen should have reached a production rate of 525,000 barrels per day by 2010, according to a 2005 agreement between Maersk and the government, but the field’s capacity has stagnated at 300,000 bpd or roughly one half of Qatar’s national oil output.

France-based Total’s CEO Patrick Pouyanne confirmed the company’s bid on the tender earlier this year, according to an official spokesperson.

Qatar has also become the largest producer of liquefied natural gas in the past three decades. The country’s oil minister currently serves as the president of OPEC.

By Zainab Calcuttawala for Oilprice.com

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