Doha too quiet on North field

30 May 2008

A three-year pause for breath is turning into an eight-year hiatus.

An important piece of information is missing from the debate over the state’s future economic development.

Qatar is in a difficult position. Its initial decision in 2005 to impose a three-year moratorium on new gas projects in the North field was not the news that its Gulf neighbours or oil majors wanted. But today they would welcome any news at all on the field.

Some 18 months after the original suspension, Qatar Petroleum (QP) extended the deadline until 2010, saying no decision would be taken about the future development of the field before then.

Now, even that date looks in doubt. The latest indications from QP are that it may be 2013 before any decision is taken on the world’s largest non-associated gas field. A three-year pause for breath is turning into an eight-year hiatus.

The importance of the field is obvious. With reserves estimated at 900 trillion cubic feet, equivalent to 14 per cent of the world’s total, the field has a life span of more than 400 years, based on current production capacity.

Qatar says it will only embark on an expansion of activity when it is satisfied it can increase gas output without damaging the potential of the reservoir. This means conducting a study to determine its condition and location, effectively producing a new model of the reserve.

This is sound logic. Given the huge ramp-up in gas demand both within the region and globally, it is not in anyone’s interests to simply mine a reservoir without considering the best way to ensure its longevity.

But Qatar needs to be careful. By giving no clues as to the progress of its studies, a hugely important piece of information is missing from the debate over the state’s future economic development. At the same time, gas-thirsty customers in the region and beyond are left to question the wisdom of relying on the field for future supplies.

An interim indication of a realistic date for the lifting of the moratorium and an update on the progress of QP’s study would go a long way towards allaying the increasingly fevered speculation surrounding the field.

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