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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."
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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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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.