At a town hall meeting, he had early this year hinted at providing “continuity of service to the people” who are contributing to the successful operations of its Al Shaheen project, which will be operated and managed by North Oil Company, a 70:30 joint venture between QP and Total from 2017.
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Maersk said on Monday it will stop its 25-year involvement in the Al Shaheen offshore field when the current agreement expires in July 2017, after losing a bid for renewal.
During the past 24 years Maersk Oil and QP have together developed the Al Shaheen Oil field into Qatars largest off-shore producing oil field which today accounts for approximately 40% of Qatar’s total oil production.
Total CEO Patrick Pouyanne delivers a speech during the opening ceremony of the 26th World Gas Conference in Paris, France on June 2, 2015. “This agreement is in line with Total’s strategy to reinforce its presence in the Middle East, in particular by accessing giant fields and by complementing its portfolio with low-technical cost oil assets”.
QP President and CEO Saad Sherida Al-Kaabi said that objective of the bidding process for the new company which started in 2005 was to choose a partner that has world class technical capabilities. The field, which began production in 1994, consists of 30 platforms and 300 wells.
“Maersk Oil is growing as a result of improved operating performance and with major projects like Culzean in the United Kingdom and Johan Sverdrup in Norway, we continue adding new production through to the end of the decade”. Maersk Oil is now the operator of the field, but its contract expires next year. In a short distance, the reservoir rocks change from fractured and nearly cavernous in nature, to hard, chalk-like formations where oil is more likely to be trapped. To overcome this challenge, Maersk Oil has drilled long horizontal wells that maximize contact with the reservoir; a method of drilling down to and then along the reservoir, as opposed to down and through it. “After this Maersk Oil looks like a more obvious divestment candidate”, analyst Morten Imsgard from Sydbank said.
Previously, the operations of the offshore field were under A.P. Moller-Maersk and the contract was to renew before its license expiration date in 2017.
In 2014, Maersk opened its digital core laboratory in Doha, Qatar, to support research around enhanced oil recovery, particularly in carbonate reservoirs, such as the Al Shaheen field. Analysts said that without the Qatar contract Maersk Oil would probably be too small to be listed as a stand-alone company, and that the business could therefore become a takeover target for larger oil companies.
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“Total is honored to have been awarded a 30% interest in the Al-Shaheen concession”. Maersk Oil has helped to recover more than 1 billion bbl from the field.
