Paris-based Gaz de France (GdF) and Germany’s Wintershall are frontrunners to win the first of two new offshore exploration blocks as Qatar looks to fast-track its programme to increase crude production to 1.1 million barrels-a-day (b/d) by 2010.
Doha’s state-run oil company, Qatar Petroleum (QP), has decided to award the four blocks in two phases to speed up the process, rather than wait to agree on all four at the same time. Oil majors could begin work on the first two at the end of 2008, according to one executive close to talks.
GdF is in discussions with QP to start exploration work on block 7. This is part of an area, along with blocks 1 and 8, where Qatar completed a study in 2006 of reservoir structures below.
It follows a long-term agreement between QP and GdF for exploration, production and downstream activities signed in January.
Wintershall, which is already drilling for oil in blocks 3 and 11, is expected to be the preferred bidder for block 8, about 75 kilometres offshore.
Awards for the first two blocks could be awarded by the end of 2008. QP expects to release the tender for two further areas, blocks 9 and 14, by September.
With Qatar’s moratorium on the giant North field effectively sidelining any new gas ventures in the country, attention has turned to the development of the state’s oil reserves following a period of neglect for much of the 1990s.
The introduction of international oil companies into Qatar’s offshore fields has helped to push up production over the past decade, while capacity at QP’s own fields – the onshore Dukhan and offshore Bul Hanine and Maydan Mahzam fields – has been almost static, at about 400,000 b/d.
Among the activity being carried out by international firms, Canada’s EnCana is conducting seismic work in onshore block 2, in an agreement that is expected to expire in October.
The US’ Anadarko Petroleum Corporation is undertaking exploration in offshore block 4 but sold its majority stakes in blocks 12 and 13 to the US’ Occidental Petroleum for $350m in May 2007.
Canada’s Talisman is carrying out exploration on offshore block 10 and India’s ONGC Videsh is working on the Najwet Najem oil structure, also offshore.
The biggest chunk of Qatar’s capacity increase is expected to come from a capacity upgrade at the Al-Shaheen field in Block 5.
GdF declined to comment on the forthcoming offshore awards and Wintershall was unavailable for comment.
A previous bidding round for offshore block 14 in 2005 received little interest from international oil companies.