ONCE considered to be in terminal decline, Qatar’s oil industry has taken on a new lease of life over the past two years. Innovative production sharing agreements and new field developments have added 50,000 b/d of new production capacity and lifted output to a 15-year high of 470,000 b/d. With further investment planned, capacity is set to rise to 700,000 b/d by 2000.

The 60,000 b/d increase in crude oil production over the past 12 months is largely attributable to Qatar General Petroleum Corporation’s (QGPC’s) decision to grant foreign investors a greater role in the industry. The centrepiece of the policy has been the development and production sharing agreement (DPSA) signed with the US’ Occidental Petroleum Corporation in October 1994 for the offshore Idd al-Shargi field. Since it came into force, output from the field has increased five-fold to 75.000 b/d. Further water and gas injection programmes, coupled with additional debottlenecking and horizontal drilling, are set to see production reach 100,000 b/d by the end of 1996.

More conventional exploration and production sharing agreements are also paying dividends. In the offshore Al-Shaheen field, Denmark’s Maersk Oil & Gas has raised output to an estimated 30,000 b/d through extensive horizontal drilling. Production is expected to begin at a rate of 20,000 b/d in early 1997 at the offshore Al-Khaleej field, operated by France’s Elf Aquitaine. The US’ Arco has recently received the go-ahead to develop 25,000 b/d of capacity at the Al-Rayan field, located on the southern fringes of the North field.

QGPC has chosen to develop the onshore Dukhan field itself. It plans to raise output by 100,000 b/d over the next three years, through an intensive drilling programme, a major gas recycling scheme on the Arab D reservoir and an extensive upgrade of existing facilities in the field (see page 8).

On the exploration front, the US’ Chevron Corporation is the latest entrant, having been awarded the block one northwest concession.

A formal contract award is also awaited on the block one southeast acreage.

In the spring, the second liquefied natural gas venture, Ras Laffan LNG Company (Rasgas), took a major step forward when $1,400 million-worth of construction contracts were placed. At present Rasgas has only one firm sales and purchase gas agreement, to supply 2.4 million tonnes a year (t/y) to the Korea Gas Corporation (KGC). The two sides resumed negotiations in June on an option for a further 3 million t/y from 2000.