French oil major Total has announced its plans to develop the Al-Shaheen oilfield in Qatar over the next five years, at a price of approximately $2 billion. The company recently won a 30 percent stake to operate in the area.
Qatar Petroleum, which is owned by the state, owns the remaining portion of the stake. Saad al-Kabbi said that Total and Qatar Petroleum will form North Oil, a brand new company created for the project. Al-Kabbi said that Total will be in charge of the overall project.
Patrick Pouyanne, Total's CEO, said that the company has plans to invest in the area from 2017 to 2022. Pouyanne added: "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."
Total will replace Maersk Oil, which has been operating in the Al-Shaheen since 1992 and has a production agreement that will expire next year. Maersk, which is a subsidiary of the Danish company A.P. Moller-Maersk, had been involved in a tender process, and had at one time expected to retain the right to operate in the Al-Shaheen. However, a source in the Qatar oil sector reported that the government issued the tender since it wanted to see production jump to 500,000 barrels per day.
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The government had hoped that the Al-Shaheen would have hit 525,000 barrels per day by 2010, as outlined in a 2005 agreement with Maersk, but the capacity has plateaued at 300,000 barrels per day.
The Al-Shaheen oilfield has been producing for 22 years, and at it is responsible for 40 percent of the crude oil produced in Qatar. Over the last 30 years, Qatar has become the largest producer of liquefied natural gas, and its oil minister is the current president of OPEC.
By Lincoln Brown for Oilprice.com
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