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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?

Qatar Petroleum to take over Tasweeq by end of 2016

Qatar Petroleum (QP) has confirmed it will absorb Tasweeq by the end of this year after a Cabinet decision gave the state-backed energy giant more responsibilities. Tasweeq was an independent government firm that sold oil and gas prices to foreign customers.

In a statement on QNA, QP said Tasweeq’s management and employees would oversee day-to-day operations during a “transition period.” It added that it plans to ensure “efficiency in the use and deployment” of the combined group’s staff, but did not confirm whether the move would lead to job loses.

For illustrative purposes only.

Maersk

For illustrative purposes only.

To squeeze more money out of its oil and gas resources, Qatar is considering creating a new government-owned company to market and sell its petroleum products.

The move, which got the Cabinet’s approval yesterday, comes as the country consolidates several of its state-backed agencies and slims down its government operations.

The draft law signed off on by the Cabinet would “delegate Qatar Petroleum as a representative to market and sell government-regulated products on its behalf.”

It would amend Decree Law No. 15 of 2007, which is the measure that created the Qatar International Petroleum Marketing Co. (Tasweeq) nine years ago.

Tasweeq

Currently, Tasweeq sells all of Qatar’s petroleum exports. It is not a Qatar Petroleum (QP) subsidiary and on its website, says it “operates independently from other oil and gas companies.”

For illustrative purposes only

For illustrative purposes only

Instead, it buys refined products such as propane and butane from producers including QP, QatarGas and RasGas and then resells those products under its own name abroad.

Tasweeq said last year it exports approximately 44 million tonnes of petroleum products annually, with one-quarter of its sales going to Japan.

However, a 2014 report by Oxford Business Group said Qatar’s output is on pace to grow considerably as new manufacturing facilities are completed.

QP shakeup

Any changes would still need to be approved by the Emir. But they are adopted, Tasweeq’s responsibilities would be handed to Qatar Petroleum. This would be the latest shakeup involving one of Qatar’s largest energy firms.

Photo for illustrative purposes only.

QP/Facebook

Photo for illustrative purposes only.

Starting in late 2014, Qatar Petroleum underwent a restructuring that included a takeover of its foreign investment arm, a sale of non-core assets such as a catering company and the laying off of expat employees, Bloomberg reported last year.

The move came amid a broader restructuring of Qatar’s government, which is grappling with lower revenues due to the prolonged slump in oil prices.

In an economic update week, officials said they expect to run budget deficits for at least three years and are trying to cut government expenditures and administration costs.

In addition to consolidating state ministries, some government-backed organizations and agencies are also being streamlined, including the Qatar Investment Authority.

A Tasweeq spokesperson did not immediately respond to a request for comment.

Thoughts?