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Qatar forms new oil company for largest oil field

Staff writer ▼ | June 29, 2016
State-owned Qatar Petroleum, QP, has established a new company to take on the future development of Al-Shaheen, its largest oil field, after awarding a 30% joint venture contract to Total.
Exploration   The establishment of the North Oil Company
The establishment of the North Oil Company concludes a year-long bidding process for the development and operation of the offshore field, with operations set to begin in July next year, QP said, Platts reports.

QP will retain a 70% stake in the company, while Total will own 30% of the license for the production and sale of crude from Al-Shaheen for 25 years.

Total's award is its second major win in the Persian Gulf in the last two years, following its signing of 10% in Abu Dhabi Company for Onshore Operations, or ADCO, which develops several of the biggest fields in the UAE.

It also holds various stakes in Qatar's LNG sector, including a 20% interest in the upstream portion of Qatargas 1, and 10% in the Qatargas-1 liquefaction plant joint venture. It is also a partner in the Laffan Refinery.

Total replaces Denmark's Maersk Oil, which had been the operator of the field, but lost out during the tender.

Maersk Oil, which has been running the field since 1992, had originally planned for Al-Shaheen's output to achieve 525,000 b/d by 2010, but those plans were hindered by thin oil reservoirs that are spread out over a large area, and output remained at around the 300,000 b/d level, around 40% of Qatar's total output.

Maersk was entitled to 164,000 b/d out of total production of 350,000 b/d during the first quarter of 2016. It will continue to operate Al-Shaheen until the end of the current license in July 2017.

Al-Shaheen cargoes are currently sold by state-owned Qatar International Petroleum Marketing Co., or Tasweeq. QP announced Sunday it plans to integrate Tasweeq into its operations by the end of the year as it attempts to cut costs.

This follows moves in late 2014 to re-integrate QP's overseas investment arm, Qatar Petroleum International. Both companies were established in 2007.