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Monday, March 8, 2021

Maersk loses Qatar oil field rights, but says no layoffs expected

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Al Shaheen oil field
Al Shaheen oil field

Maersk Oil will soon begin scaling back its operations in Qatar after failing to renew a deal to develop the nation’s largest oil field.

The Danish energy firm has operated the Al Shaheen oil field for almost 25 years.

But yesterday, Qatar Petroleum (QP) announced that it has selected French oil and gas firm Total over competing bids from Maersk and other companies to do the work.

The offshore reserve is located about 80km off of Qatar’s northeast coast and accounts for approximately 40 percent of the Gulf country’s daily oil output, or roughly 300,000 barrels per day.

No layoffs

In a statement following QP’s announcement, Maersk said it plans to reduce its headcount in Qatar without laying off staff:

“Maersk Oil will be redeploying a number of its employees which today are based in Qatar elsewhere in its global organization. The majority of remaining employees in Qatar are expected to be offered employment by the new operator.”

A QP official echoed this, saying Maersk Oil’s employees in Qatar will be guaranteed a new job, Reuters reported.

A Qatar-based spokesperson for Maersk Oil did not immediately respond to questions about what presence, if any, the company would retain in the country.

In addition to its offshore operations, Maersk opened a research center in the Qatar Science and Technology Park (QSTP) in 2011 to find new ways of extracting more oil from “challenging” fields such as Al Shaheen.

Photo for illustrative purposes only.
Photo for illustrative purposes only.

It also explored technologies to minimize the impact of offshore operations on the environment and houses researchers who study whale sharks, which congregate around Al Shaheen’s offshore oil platforms in the summer.

The company has also participated in several social and educational initiatives in the community, including a safe driving campaign and and effort to promote science and technology in schools through the use of robotics.

New joint venture

Maersk began developing Al Shaheen in 1992 and has called it “one of the most complex offshore oilfield developments in the world.”

As the end of the company’s 25-year agreement approached, QP said last year that it was inviting other international oil firms to compete against Maersk for the the field’s future operation and development rights.

The new agreement between QP and Total takes effect in July 2017 and involves the creation of a joint venture.

The North Oil Co. will be 30 percent owned by the French energy firm, and the remainder will be held by QP.

In a statement, QP president and CEO Saad Sherida Al-Kaabi said:

“QP’s objective for the competitive process was to choose a partner that has world class technical capabilities that enable it to continue the development and operation of Al Shaheen Field in partnership with QP, while at the same time ensuring the highest possible financial return to the State of Qatar.”

Total in Qatar

For its part, Total said it was planning to ramp up its local operations.

“The (company) will deploy its best technical expertise and experienced teams to this field,” Total chairman and CEO Patrick Pouyanné said in a statement.

He told a press conference yesterday that the company planned to spend approximately $2 billion integrating its technology into the field’s operation between 2017 and 2022.

Total has a long history in Qatar, and said it’s had a local presence since 1936.

It currently owns stakes in various Qatargas operations as well as several petrochemical plants, including the Laffan Refinery.

Total’s relationship with QP extends beyond the Gulf state. The French firm says Qatar Petroleum International holds a 15 percent stake in Total E&P Congo.

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