En Español

Very usefull links


News links




Dow Jones

Oil price



Views and News





Total seen with excelent chances to move in on Qatar gas deals


Petroleumworld 07 11

Total is well placed to take a lead role in helping Qatar expand output from the world's largest gas field, largely thanks to its involvement in the Iranian side of the shared deposit, two sources familiar with Doha's thinking said.

That puts the French oil major ahead of rivals like Exxon and Shell in the early running for developing the expansion, which the tiny Gulf state announced as it seeks to counter growing isolation caused by a regional diplomatic rift.

Total boss Patrick Pouyanne signed a deal this month to develop the South Pars field, as Iran's part of the shared reserves are known, becoming the first oil major to return to the country since the lifting of sanctions.

As he was ironing out details of that agreement, he was careful to keep Qatar in the loop.

"Of course, I won't go to the same field in Iran without telling Qatar," Pouyanne told Reuters.

"The Iranian block where we are supposed to produce is next to the border with Qatar. When I travelled to Doha I discussed it with the (Qatari) authorities and they told us: 'It is ok - we know you'."

Pouyanne says Total strictly respects confidentiality of data vis-à-vis each country. The executive's cross-border strategy, however, appears to be paying early dividends.

"I would expect Total to be in the strongest position for the new (Qatari) project, because of the political issues at play and their recent deals in (Iran's) South Pars," one senior Gulf energy source said.

On one level, working with both countries who share a prized gas asset seems obvious. But it is not without risks for Total.

Saudi Arabia, the United Arab Emirates, Bahrain and Egypt have imposed political and economic sanctions on Qatar, demanding that it stops fostering terrorism and courting Iran, Riyadh's main rival. Qatar denies the accusations.

Besides Iran and Qatar, Total also has large projects in Saudi Arabia and the UAE, highlighting the complexity of investing in the Middle East.

Cost Savings Possible

Qatar, already the world's largest liquefied gas exporter, lifted a self-imposed ban on development of the North Field in April and last week it said it would raise gas output capacity by around 30 percent to 100 billion cubic metres.

The move was widely seen as a show of strength in its dispute with Gulf neighbours and Egypt.

Qatar has built its gas export power over the past decade with support from global oil majors including ExxonMobil , Total, and Royal Dutch Shell.

The projects have generated billions of dollars for Qatar and its Western partners and the planned expansion to its gas capacity would make Qatar even more dominant in the gas market, accounting for a third of current global LNG output.

Sources told Reuters earlier this month that Exxon, Shell and Total have all expressed interest in helping Qatar expand its gas facilities, with top executives travelling to Doha in recent weeks even after a spike in political tensions.

Exxon, Shell and Total declined to comment on plans to participate in Qatar's tenders to expand gas capacity, which are yet to be announced and will take several years to complete.

Even without those tenders, Total's role in Qatar is set to grow significantly after it won a 30 percent stake in 2016 in a new 25-year contract to operate its largest offshore Al-Shaheen oilfield.

Total, which will take over the field operation from Maersk Oil on July 14, plans to invest $2 billion in expanding the field over the next five years.

With Qatar's gas production costs among the lowest in the world, being a part of any expansion would give Total a strategic advantage over rivals in the fast-growing global LNG market.

Total's involvement in fields on both sides of the Qatari-Iranian border may also help save on costs and service contracts as well as better understand the fields' geology, although Pouyanne said there was no mechanism to coordinate production jointly by the countries.

The development of the new capacity over the next 5-7 years could cost between $14-$18 billion, according to consultant Wood Mackenzie.

"Qatar may also be keen to show it is still open for business despite the current diplomatic disputes with some of its Gulf neighbours," it said.

Story by Tom Finn, Ron Bousso and Dmitry Zhdannikov ; Writing by Dmitry Zhdannikov; Editing by Mike Collett-White from Reuters.

07 10 2017

We invite all our readers to share with us
their views and comments about this article.
Write to editor@petroleumworld.com

By using this link, you agree to allow PW
to publish your comments on our letters page.

Any question or suggestions,
please write to: editor@petroleumworld.com

Best Viewed with IE 5.01+ Windows NT 4.0, '95,
'98,ME,XP, Vista, Windows 7,8,10 +/ 800x600 pixels








Contact: editor@petroleumworld.com,

Editor & Publisher:Elio Ohep/
Contact Email: editor@petroleumworld.com

CopyRight © 1999-2016, Paul Ohep F. - All Rights Reserved. Legal Information

PW in Top 100 Energy Sites

CopyRight©1999-2017, Petroleumworld   / Elio Ohep - All rights reservedThis site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission fromPetroleumworld or the copyright owner of the material.