Maersk Oil says it will be leaving Qatar after losing the contract to operate the country’s largest producing offshore oil field.
The news comes as state-owned Qatar Petroleum announced Tuesday that it selected French oil major Total as its parter for the future development of the giant Al-Shaheen oil field. Maersk Oil has operated the field since 1992 under a 25 year production sharing agreement set to expire in July 2017.
The loss of the contract is seen as a major blow to Maersk Oil just days after its parent, Denmark’s A.P. Moller-Maersk, named container shipping head Soren Skou as group CEO amid talks that the group may be split up into separate companies.
Qatar Petroleum launched the competitive tender for the contract for the future development of Al-Shaheen in July 2015, inviting a number international oil companies to participate.
“Maersk Oil presented a highly competitive technical and commercial proposition based on more than 20 years of technical knowledge and experience working with the Al Shaheen field,” says CEO in Maersk Oil, Jakob Thomasen.
In a statement announcing Total as the winner of the tender, Saad Sherida Al-Kaabi, President & CEO of Qatar Petroleum, thanked Maersk Oil for their “significant efforts and valuable contribution in managing Al-Shaheen field during the past quarter of a century and for the offer they have presented,” and encouraged their participation in future opportunities in Qatar.
Maersk Oil will continue to operate the Al-Shaheen field until the end of its current license in July 2017.
Under QP’s agreement with Total, the two will set up a joint venture Qatari-based company named North Oil Company that will develop and operate the Al-Shaheen field for a period of 25 years beginning immediately upon expiration of the agreement with Maersk Oil. The new company will be 70% owned by QP and 30% by Total.
Maersk Oil said that under the terms offered by Qatar Petroleum, a minority shareholding for Maersk Oil in the new joint venture would have create only a “marginal impact on the Maersk Group earnings” in the years ahead.
“Maersk Oil is growing as a result of improved operating performance and with major projects like Culzean in the UK and Johan Sverdrup in Norway, we continue adding new production through to the end of the decade. We will continue to deliver in the years ahead based on a strong operational performance and cost focus and ensure that our major projects are executed on time and on budget,” added Jakob Thomasen.
Al-Shaheen oil field is located in the Persian Gulf about 50 miles off the coast of Qatar in the North Gas Field. It is among the world’s largest oil fields and currently produces around 40% of Qatar’s crude oil, at around 300,000 barrels per day.