Qatar - The Background.

After Shaikh Hamad bin Khalifa's September 1992 cabinet reshuffle, when he was crown prince, the state-owned Qatar General Petroleum Corp (QGPC) was given control over the petroleum sector. E&P terms to foreign firms improved and EPSAs were offered for new areas, onshore and offshore, and for existing offshore fields needing EOR systems.

The radical change for the better was necessary because upstream maintenance work and exploration had been reduced considerably in the first half of the 1980s, with only one rig active in 1984-87. Now there are several IOCs operating in blocks acquired since offers of EPSAs were made in 1993. QGPC now is named QP.

Occidental Petroleum (Qatar), a unit of Oxy, was the first IOC to sign a PSA in July 1994 for EOR-based operations on a producing field: the offshore Idd al-Shargi North Dome (ISND), where output had fallen to less than 20,000 b/d. Oxy began operating in the field in January 1995 and quickly raised its production. The field's capacity now is 127,000 b/d. Similar PSAs for other QP fields will be expected in the coming years, when their reservoir pressure will decline and they will need advanced EOR systems.

Idd al-Shargi South Dome (ISSD), on which Elf (now part of Total) had done tests with horizontal drilling, was given to Oxy in September 1997. In July 1999 Oxy began a seven-well drilling programme and raised ISSD's production capacity to 17,000 b/d in 2006.

Block-1, offshore, is about 8,300 sq km south-east of the peninsula which was relinquished by BP in 1989. It was held by Elf from 1990 but was relinquished in July 1994. Since then the tract has been divided into two separate blocks: B1/North-West and B1/South-East.

B1/N-W was acquired in April 1996 by Chevron (60%) and MOL of Hungary (40%). Chevron, the operator, was committed to drill two exploration wells. But the US major relinquished the tract in 2001 after having drilled dry wells.

B1/S-E had three small oilfields, close to the oil-producing al-Bunduq field, found in the 1960s and early 1970s by Shell but left undeveloped. This was taken on July 15, 1997 by a Japanese group, Qatar Petroleum Development Co. (QPDC) under a 25-year EPSA extendable for another five years. QPDC is led by Cosmo Oil. Its partners are United Petroleum Development (UPD) and Nissho Iwai.

QPDC developed the structures and their output began in April 2006 at the rate of 6,000 b/d, which has reach 14,000 b/d and will be expanded to 20,000 b/d by 2010/11. UPD operates the nearby Bunduq oilfield, which is shared equally by Qatar and Abu Dhabi. B1/S-E's oilfields are tied to UPD's system (see gmt10QatrFieldsSep7-09).

Block 2 was awarded in March 1998 to Chevron which was to do 2-D and 3-D seismic by end-1998 and exploration drilling in 1999-2001. Chevron's partners in this are Svenska of Sweden and EnCanada. The Canadian company, which joined this venture as operator in an EPSA with QP in March 2002, spudded a second exploration well on the block in October of that year.

EnCanada was then analysing data from the first exploration well. (En-Canada is the 50% partner of Chevron in Bahrain's offshore Block-5 which was originally acquired by Texaco).

Maersk Oil Qatar in mid-1992 signed a 25-year EPSA for offshore Block-5. This tract contains structures linked to a section of the North Field. Maersk has since concentrated its exploration work on the Khara'ib geological zone, where oil was found trapped in tight reservoirs.

Using vertical and horizontal drilling, Maersk has found al-Shaheen field, about 1,066.8 metres below the sea-bed. This has turned out to be a giant with five reservoirs, requiring 70 wells. Maersk has established that the oil reserves there are far bigger than originally thought. Al-Shaheen went on stream in late 1994 at 10,000 b/d of 29-33? API oils. Now it has a capacity of 300,000 b/d. This should reach 525,000 b/d by end-2009. Maersk also produces a fairly large volume of gas. Maersk has the option of extending its 25-year EPSA for another five years.

Total explores Block-6 offshore, which Elf acquired in early 1989. This block now has an oil-producing field, al-Khaleej, whose capacity now is 80,000 b/d, expanded from 50,000 b/d in 2007. Drilling began in 1990 and Elf made the al-Khaleej find in June 1991.

This is a 2,800 sq km tract east of Block 1 and was previously explored but relinquished by Shell. Total has a 25-year PSA on this, similar to Maersk's, with an option to extend its period for another five years. Total has bought Agip's 45% stake in this.

Block-7, 4,500 sq km offshore, is adjacent to Qatar's eastern land border. Mobil (now ExxonMobil) did technical studies on it but decided not to bid.

A Japanese consortium took up this block in 2001 and was committed to carry out further exploration. Drilling began in September 2001.

Block-8 is a 2,813 sq km tract offshore covering an old QGPC area around (but excluding) the oil producing fields of Idd al-Shargi, Bul Hanine and Maydan Mahzam and the Halul island terminal. This block was taken by Pennzoil of Houston under a deal signed in July 1994. It was committed to drill four wells in four years, starting with one wildcat in late 1995, to test the Cretaceous and Jurassic.

The block lies 75 km from the shore in water depths ranging from 30 to 36 metres near the maritime borders with Iran and the UAE. It is a salt basin similar to that in the Gulf of Mexico, where 3-D seismic data have led to good oil finds. (Block-8 is equal to 117 blocks in the Gulf of Mexico's federal planning area). In September 1997 Novus of Australia took a 25% stake in Block-8.

ONGC Videsh (OVL), a unit of India's state-owned Oil & Natural Gas Corp, in March 2005 got an EPSA for the 120 sq km offshore Najwat Najem oilfield some 100 km north-east of Doha. A Press Trust of India report on March 2, 2005, quoting an ONGC official, said the block held 300m barrels of oil.

OVL was do a two-year appraisal work on a field, which it was then to develop and connect to the Halul island terminal for processing and export.

The A-Structure, close to Iranian waters and the North Field, is to be awarded to the best bidder. Al-Karkara is a gas/condensate field tested by BP in 1987. But BP failed to get Doha to revise EPSA terms (at the time, QGPC was still under the control of the then emir, Shaikh Khalifa, whose aides on the company's board were strongly against giving foreign firms terms similar to those in Abu Dhabi, Oman, etc). Elf appraised both al-Karkara and the A-structure.

By late 1996, QGPC had launched a programme to expand Qatar's oil production capacity and tap its gas reserves. This called for the drilling of 177 wells for oil and gas. Many of the wells were to be drilled for gas in the North Field. QatarGas, the first of the LNG ventures, drilled 20 gas wells, with Total being the upstream operator. ExxonMobil drilled 20 wells for RasGas, the second LNG venture. Many more wells were to be drilled into the North Field for various ventures under separate PSAs.

In May 2000 ExxonMobil and QP signed a EPSA to explore and develop a North Field section and produce 1,800 MCF/d of gas. They have since signed an EPSA for another part of the North Field. Each of Shell and ConocoPhillips has an EPSA covering other sections of the North Field for integrated gas E&P/LNG ventures. Abu Dhabi government-controlled Dolphin Energy (DEL) has a EPSA for a section from which it is producing gas and exporting it to the UAE (see gmt10QatrFieldsSep7-09).

During a visit to Doha by then Russian President Vladimir Putin, QP Chairman and CEO Attiyah and LUKoil CEO Vagit Alekperov on Feb. 12, 2007, signed an MoU for oil and gas E&P projects. Under the MoU, they were to work within Qatar and abroad. Alekperov said: "Our company is interested inQatar, given the strategic significance of the Gulf region as the largest petroleum province of the world".

Print Get the Mag Weekly Updates