ExxonMobil now becomes the fourth partner to join QatarEnergy’s North Field Expansion project, the multi-billion plan and the largest of its kind.
QatarEnergy signed a strategic partnership with ExxonMobil on Tuesday for its North Field Expansion project at the Qatar Economic Forum (QEF) hosted by Bloomberg.
This comes after the oil giant sealed a partnership with international gas firms, including TotalEnergies, Eni, and ConocoPhillips, all of whom were signed this month.
The companies will form a joint venture, with ExxonMobil holding a 25% stake, QatarEnergy CEO and Energy Minister Saad Sherida Al Kaabi said.
The arrangement unveils a 6.25% stake for ExxonMobil in the North Field East expansion, Al Kaabi added.
That would make Exxon’s share of the project equal to TotalEnergies while Eni and ConocoPhillips have around 3.12% each.
At the second Qatar Economic Forum, an event where world leaders gathered to discuss topics such as the global energy market and its sudden changes, the energy minister criticised some governments for their decision in deeming a windfall tax on oil companies as ‘necessary’ due to their high profit.
Speaking on behalf of “some” international oil companies, Qatar’s Energy Minister Saad Sherida Al Kaabi said “I don’t see the governments coming to pitch in when they were losing money and borrowing when the oil price was negative,” suggesting that a longer term approach must be taken.
In order for the gas industry to survive, Al Kaabi noted, companies need to have large amounts of money to be able to invest for the future, “whereas if there is higher margin for oil and gas companies and then we tax them [oil companies] and try to take money away as much as possible from them [oil companies] then you can’t ask them to invest.”
A windfall tax is a one-off tax imposed by a government on a firm, with the intention to target companies that benefitted from a matter they were not responsible for, in other words, a windfall.
Also speaking at “Ensuring Energy for All” panel at the QEF, ExxonMobil CEO Darren Woods on Tuesday said it would take time for energy market volatility to end and that he expects three to five years of somewhat tight gas markets.
Woods further noted that the company had asked the United States administration for a more efficient investment process.
“The more we’re asked to increase production, the less spared capacity will be available and that will in turn increase the volatility,” Sheikh Nawaf Saud Al Sabah, Deputy Chairman and CEO of Kuwait Petroleum Corporation said during the panel discussion, regarding the volatility for gas prices.
Meanwhile, US President Joe Biden this month accused the US oil industry, in particular ExxonMobil, of “capitalising” on a supply shortage to expand profits after a report showed inflation surging to a 40-year record high.
Biden told reporters the company had “made more money than God.”
North Field Expansion project
The nearly $30 billion North Field Expansion includes six LNG trains that will drastically increase Qatar’s liquefaction capacity by 64% by 2027.
The units have the capacity to produce eight million tonnes of LNG per year.
The current standing of 77 million tonnes per annum (mtpa) will jump to 110 by the year 2025. During the first phase, four mega-trains will lead the productions.
The second phase, known as the North Field South Project, will boost the capacity from 110 mtpa to 126 mtpa by 2027. This would make Qatar the world’s single largest producer of LNG.