NORTH FIELD STUDY: Speculation rages over reserves

At the height of Qatar's remarkable ramp-up in liquified natural gas (LNG) production capacity, the decision in 2005 to place a moratorium on future exploration in the giant offshore North field was an unwanted surprise for many.

Qatar Petroleum (QP) officials had originally said the moratorium would be reviewed in 2007/08, but in October 2006 it was extended until 2010.

Al-Suwaidi now says the results of the study will come out anytime between 2010 and 2012, as it will take that long to get a good understanding of the reservoir.

He is dismissive of persistent rumours that the real reason for the moratorium is QP damaging its reservoir or discovering less reserves than were previously thought to be in place.

'Talk of a damaged reservoir is not very

accurate,' he says. 'A lot of people interpreted this [the moratorium] as we are running out of gas or the North field is not performing as expected. This is not the truth. We need to study [the field] to establish whether this is true or not.'

Analysts have also queried assumptions that the North field is a single, large, homogenous structure, claiming evidence points to a more complex reservoir containing variable hydrocarbon qualities.

Qatargas has drilled 50 of an estimated 200 wells as part of its exploration efforts, and Al-Suwaidi says it is natural to get different results from different wells.

'We know where are the best areas - the best layers if you like - and if you move away from those areas you will get different results,' he explains. 'This is not unusual in gas or in any hydrocarbons. Some areas are better than others. It tells you something but it does not alter the fact that you still have the market reserves.'

He adds that the position should be seen as positive for QP, the state and other shareholders in the projects, as well as for existing buyers.

'As a national oil company, our interest is to see the reserves last as long as we can,' he says. 'This is different to international oil companies with their pressure from shareholders to increase reserves. They like to monetise their reserves as soon as possible.'

Qatar is likely to negotiate new deals after the moratorium is lifted, says one London-based analyst, but he increasingly expects technology to play an important role. 'Limitless easy gas will not come out of the North field forever,' he says. 'For companies positioning themselves in Qatar, it is not just a matter of lining up for an invitation. They will need real expertise as well.'