Browsing 'oil' News

Photo for illustrative purposes only.

RasGas

Photo for illustrative purposes only.

With oil prices finally seeing an upturn, Qatar’s energy minister has called for international cooperation to rebalance the market.

Yesterday, Dr. Mohammad bin Saleh Al Sada, Minister of Energy & Industry, led a delegation from Qatar at the 35th meeting of the Petroleum Cooperation Committee.

The Riyadh meet included the ministers of oil and energy from five GCC states and Russia.

Qatar's energy minister Al Sada with counterparts from Saudi Arabia and Russia

QNA

Qatar’s energy minister Al Sada with counterparts from Saudi Arabia and Russia

“The difficult phase is over… although the market is heading to being balanced, it needs our joint effort,” Al Sada reportedly said, suggesting support for oil production cuts.

He added that over the past two years, falling oil prices have caused investment liquidity to dry up.

As a result, there is a pressing need to attract significant investments on oil-related projects, QNA said.

Al Sada’s call was echoed by Khalid Al-Falih, Saudi minister of energy, industry and mineral resources.

“We are optimistic that oil prices will continue to improve in the future,” Kuwait’s state news wire KUNA reported Al-Falih as saying.

Cutting production

Earlier this year, Al Sada said oil prices needed to be around $65/barrel to give governments the chance to invest more in securing the world’s energy supply and “avoid any price shock.”

Brent Crude is currently trading at around $52 a barrel, which is an improvement from previous months.

Al Sada addressing reporters at GCC Ministers' meeting

QNA/Instagram

Al Sada addressing reporters at GCC Ministers\’ meeting

But the sustained low prices have hit the economies of some producing countries such as Venezuela particularly hard.

This week, President Nicolas Maduro is in Qatar as part of a regional tour to urge production cuts, thus boosting the oil price.

Qatar bailed out the South American country last year with a loan of billions of dollars in cash.

For nearly two years, Maduro has been lobbying OPEC to reduce production, and a pre-agreement was finally reached last month.

Sheikh Tamim and Venezeulan President Nicolas Maduro Moros

QNA

Sheikh Tamim and Venezeulan President Nicolas Maduro Moros

Under the proposed terms, production would be cut to between 32.50 million and 33.0 million barrels per day (bpd), down from 33.39 million bpd in September.

Russia and representatives from OPEC countries will meet in Vienna today to get more countries to sign the deal.

OPEC plans to make the agreement official at its meeting at the end of next month, though Iraq appears to still be refusing to sign.

Qatar’s breakeven

A report issued last week by the US-based Institute of International Finance (IIF) put Qatar’s breakeven oil price at $60 a barrel for 2016 and $63 for 2017.

This is around 13 percent lower than the GCC average of $69/barrel this year, Gulf Times reported.

This price includes the costs for production, exploring, well development, transportation and selling.

Countries with high breakeven prices are the worst hit when global oil prices fall.

Thoughts?

Al Shaheen oil field

Maersk

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.

Thoughts?

Report: BP, Shell among those bidding to operate Qatar oil field

Six international companies have apparently submitted bids to develop Qatar’s largest offshore oil field, including heavy hitters BP and Royal Dutch Shell, Reuters reports. It added that the others are Maersk , Total SA, Chevron Corp. and ConocoPhillips, according to sources close to the matter.

Maersk has been operating the Al Shaheen field since 1992, but its agreement with Qatar Petroleum (QP) expires next year. Earlier this month, the Danish energy firm conceded that its time on the project may be coming to an end after QP launched a new tender process. Reuters said this was because Qatar wants to increase production at the field.