Total wins stake in Qatar's Al Shaheen oilfield
Total will be in charge with operating the oilfield starting July 14, 2017, and a new company named North Oil Co. will be created to manage the joint venture
Total has won a 30% stake in a new 25-year contract to operate Qatar's largest offshore oilfield, in the second major upstream development deal for the French oil giant in the GCC in as many years, Reuters reports.
State-owned Qatar Petroleum will keep the remaining 70% in the new joint venture for the Al Shaheen offshore oilfield, which is 80km off Qatar’s waters, and which currently produces around 300,000 barrels per day (bpd).
"Total was the best bidder, we are happy to see Total win that process," Saad al-Kaabi, CEO of Qatar Petroleum, said at a news conference in Qatari capital Doha on Monday.
Total plans to invest more than $2bn in developing the Al Shaheen oilfield over five years, the company's CEO said.
"We have a plan to invest for five years 2017-22, more than $2bn in that field in order to integrate technology," CEO Patrick Pouyanne told the news conference in Doha.
"Our first objective is to maintain 300,000 barrels a day. Currently that's not a given as there's a natural decline (in production) as its a complex field," Pouyanne said.
"If we have opportunities to increase production we will, there are parts of the field which have not been developed," he added.
Total will be in charge with operating the oilfield starting July 14, 2017, and a new company named North Oil Co. will be created to manage the joint venture, Kaabi said.
The new deal is a boost for Total, which in January last year, became the first oil major to renew a 40-year onshore concession in the United Arab Emirates, putting its peers under pressure to improve terms, after the French energy company made the best offer.
Six international oil majors, including BP, Royal Dutch Shell Plc, Chevron and previous operator Maersk Oil had bid to operate the oilfield.
The deal announcement yesterday is being seen by experts as a blow to Denmark's A.P. Moller-Maersk, which has been operating the oilfield since 1992.
For years it was expected that Maersk Oil would renew its 25-year production agreement on Al Shaheen when its licence runs out in 2017. But Qatar surprised the company last year by putting out a tender for the field.
Maersk submitted a new bid for the field, but Total has apparently made the best offer, Reuters reports.
In a statement, Maersk Oil said it will be ‘redeploying a number of its employees, which today are based in Qatar, elsewhere in its global organisation’.
‘The majority of remaining employees in Qatar are expected to be offered employment by the new operator’, it added.
Qatar Petroleum's Kaabi said all of Maersk Oil's employees in Qatar will be guaranteed a job in the new company created for the venture.