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Oil Halts Slide On Crude Draw

Oil Halts Slide On Crude Draw

Oil prices regained some lost…

UAE, Qatar Warily Extend Joint Oilfield Concession

offshore rig

The United Arab Emirates and Qatar have extended a concession for an offshore oilfield that the two share—but warily, since the UAE is part of a regional blockade against Qatar, led by Saudi Arabia.

While both countries acknowledged the concession extension, the Emirates’ Supreme Petroleum Council was quick to state that, first, the concession was not awarded to Qatar petroleum and second, that “There is no commercial or trading relationship being established between the UAE and Qatar by the extension of this concession."

Earlier reports said that Qatar Petroleum has signed the extended concession with the Supreme Petroleum Council, the Emirate state oil company Adnoc, Japanese United Petroleum Development Co Ltd, and the field’s operator, Bunduq Company Limited.

The SPC’s reaction suggests that the UAE is worried about giving off the impression that it has dealings with Qatar despite the blockade, even though it is happy enough to continue receiving Qatari natural gas—an act that has not thus far provoked a reaction from its fellow blockade partners.

Qatar, meanwhile, took, the chance to highlight the importance of the deal, with its chief executive Saad Sherida Al-Kaabi saying, "We are delighted to sign this concession agreement, which will ensure the continued development and operation of the Al-Bunduq oil field for many years to come."

Related: Here’s What’s Next For Electric Cars

Qatari media also reported that the new concession has been signed by both Qatar Petroleum and Adnoc, raising the interesting question how two parties could sign the same contract without this constituting a “trading relationship”.

Perhaps the answer lies in the explanation one source from the UAE gave Arabian Business: "This concession was recently extended by each respective government to the Japanese consortium with no direct communication or engagement between the two states."

The blockade of Qatar began last June, after its neighbors accused it of aiding militant groups and of having too close ties with Iran. The group came up with a list of demands for Qatar to satisfy if the blockade was to be lifted, but the tiny kingdom flatly refused to adhere to these demands and has been steadfast in its refusal ever since.

By Irina Slav for Oilprice.com

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  • Mamdouh G Salameh on March 13 2018 said:
    Let us not split hair. The oil concession extension between Qatar and UAE is the first signal that the blockade which has been imposed against Qatar since June 2017 is starting to unravel.

    Qatar’s economy has not been affected by nine months of blockade nor have its LNG exports and oil exports to the world declined. Moreover, Qatar continued to provide UAE with its needs of gas through the Dolphin gas pipeline without interruption.

    The UAE and Qatar have had to deal with each other in relation to the offshore Al-Bunduq oilfield which they both share equally. This is not different from Qatar having to deal with Iran in relation to the North/South Parse gasfield, the biggest in the world, which both share and have, therefore, no alternative but to coordinate their exploration and production policies.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

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