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Al Shaheen oil field


Al Shaheen oil field

Maersk Oil will soon begin scaling back its operations in Qatar after failing to renew a deal to develop the nation’s largest oil field.

The Danish energy firm has operated the Al Shaheen oil field for almost 25 years.

But yesterday, Qatar Petroleum (QP) announced that it has selected French oil and gas firm Total over competing bids from Maersk and other companies to do the work.

The offshore reserve is located about 80km off of Qatar’s northeast coast and accounts for approximately 40 percent of the Gulf country’s daily oil output, or roughly 300,000 barrels per day.

No layoffs

In a statement following QP’s announcement, Maersk said it plans to reduce its headcount in Qatar without laying off staff:

“Maersk Oil will be redeploying a number of its employees which today are based in Qatar elsewhere in its global organization. The majority of remaining employees in Qatar are expected to be offered employment by the new operator.”

A QP official echoed this, saying Maersk Oil’s employees in Qatar will be guaranteed a new job, Reuters reported.

A Qatar-based spokesperson for Maersk Oil did not immediately respond to questions about what presence, if any, the company would retain in the country.

In addition to its offshore operations, Maersk opened a research center in the Qatar Science and Technology Park (QSTP) in 2011 to find new ways of extracting more oil from “challenging” fields such as Al Shaheen.

Photo for illustrative purposes only.

Klaus Stiefel/Flickr

Photo for illustrative purposes only.

It also explored technologies to minimize the impact of offshore operations on the environment and houses researchers who study whale sharks, which congregate around Al Shaheen’s offshore oil platforms in the summer.

The company has also participated in several social and educational initiatives in the community, including a safe driving campaign and and effort to promote science and technology in schools through the use of robotics.

New joint venture

Maersk began developing Al Shaheen in 1992 and has called it “one of the most complex offshore oilfield developments in the world.”

As the end of the company’s 25-year agreement approached, QP said last year that it was inviting other international oil firms to compete against Maersk for the the field’s future operation and development rights.

The new agreement between QP and Total takes effect in July 2017 and involves the creation of a joint venture.

The North Oil Co. will be 30 percent owned by the French energy firm, and the remainder will be held by QP.

In a statement, QP president and CEO Saad Sherida Al-Kaabi said:

“QP’s objective for the competitive process was to choose a partner that has world class technical capabilities that enable it to continue the development and operation of Al Shaheen Field in partnership with QP, while at the same time ensuring the highest possible financial return to the State of Qatar.”

Total in Qatar

For its part, Total said it was planning to ramp up its local operations.

“The (company) will deploy its best technical expertise and experienced teams to this field,” Total chairman and CEO Patrick Pouyanné said in a statement.

He told a press conference yesterday that the company planned to spend approximately $2 billion integrating its technology into the field’s operation between 2017 and 2022.

Total has a long history in Qatar, and said it’s had a local presence since 1936.

It currently owns stakes in various Qatargas operations as well as several petrochemical plants, including the Laffan Refinery.

Total’s relationship with QP extends beyond the Gulf state. The French firm says Qatar Petroleum International holds a 15 percent stake in Total E&P Congo.


For illustrative purposes only.


For illustrative purposes only.

A Danish energy firm that has developed Qatar’s largest oil-producing fields for nearly 25 years has acknowledged that its time on the project may be coming to an end.

Maersk has been operating the Al Shaheen field since 1992, but its agreement with Qatar Petroleum (QP) expires next year.

The firm said that the offshore reserve, located about 80km off of Qatar’s northeast coast, accounts for approximately 40 percent of the Gulf country’s daily oil output.

A year ago, QP said it was inviting other international oil firms to compete against Maersk for the the field’s future operation and development rights.

QP CEO Saad Sherida al-Kaabi

Qatar Petroleum/Facebook

QP CEO Saad Sherida Al-Kaabi

QP president and CEO Saad Sherida Al-Kaabi said at the time that Qatar was looking for “the best technological solutions for the field’s development combined with the best financial return to the state.”

The announcement was seen by some analysts as a blow to Maersk and a failure on the firm’s part to negotiate an extension behind closed doors.

Speaking to investors yesterday, Maersk CEO Nils Smedegaard Andersen acknowledged that its time may be up.

He said the company was excluding its reserves in Qatar from its forecasts beyond mid-2017, when the current 25-year deal ends.

“We are in a tender process. That means that there’s a risk that we will lose Qatar,” Anderson said, according to a transcript of the call.

The Al Shaheen field produces 300,000 barrels of oil a day, according to QP. Maersk calls it “one of the most complex offshore oilfield developments in the world.”

Al Shaheen is also known as a “sanctuary” for whale sharks that congregate around the field’s offshore oil platforms in the summer.

Maersk operates a research and technology center at Qatar Science and Technology Park that houses researchers who study whale sharks, as well as develop technologies that minimize the environmental impact of offshore operations.

In a report to investors, Maersk said it expected Qatar to announce the results of the tender in the second half of this year.


Rumailah support rig

Gulf Drilling International

Rumailah support rig

A recently-built rig that housed offshore oil workers partly collapsed into the sea off the shore of Qatar earlier this week and will need months of repairs, its owners said in an official statement.

The support barge Rumailah was a floating staff accommodation block owned and operated by Qatar-based Gulf Drilling International (GDI) and was in the Al Shaheen field, which is run by Maersk Oil Qatar.

On Sunday, July 5, the rig suffered what was described as a “punch through incident,” according to the parent company Gulf International Services (GIS), which issued a statement to Qatar’s stock exchange.

This refers to a situation when one of the rig’s support legs goes through the sea bed, causing the barge to list to the side, a source told Doha News.

All staff were evacuated from the support rig, GIS said.

“The Barge will be taken to Nakilat shipyard for repair and maintenance, which is expected to take a few months approximately. GDI advised that there were no personal injuries and that all personnel had been safely evacuated from the vessel, ” the company added in its statement to Qatar Exchange.

In a statement, Maersk Oil said: “We are supporting Gulf Drilling International (GDI) following a punch through incident offshore on 5 July, involving the GDI owned and operated Jack-up rig ‘Rumailah.’

“All personnel are safe and accounted for and no damage to Al Shaheen facilities has been reported.”

A spokesman told Doha News that an investigation into the incident is underway.

What happened

The rig, which is understood to have been built in 2014 and is known as a “liftboat,” can float and move into position, and has three legs that jack down to the sea-bed for support and stability.

Photographs of the rig after the incident, published in the Norwegian newspaper Aftenbladet, show it leaning at an angle and partly submerged. A number of small orange boats with people on board can be seen around it.

According to the paper, it had only recently come out of repairs after incurring problems with one of its jack-up legs.

The Al Shaheen oil field, 80km off Qatar’s shores, is one of the world’s largest producing fields, providing around 300,000 barrels of oil a day – one-third of the state’s daily oil production.

The field was initially discovered in the 1970s but at that time thought to be impossible to develop commercially, as the reservoirs were stretched across large distances.

Maersk Oil started working there in 1992 after it entered into an exploration and production sharing agreement with Qatar Petroleum, and two years later the first oil was produced.

In May this year, QP invited other international oil companies to compete to operate and develop the field, after the agreement with Maersk Oil expires in mid-2017.

Maersk’s Chief Executive Nils Andersen had previously voiced his optimism that the existing agreement would be extended, albeit on different terms.

“Whether it will be better or worse we don’t know, but it could easily be a win-win,” he told Danish daily Berlingske, Reuters reported at the time.