Fourth time a major international oil company has left a major multibillion dollar scheme in 2010
US oil major US’ ExxonMobil and state energy firm Qatar Petroleum are not expected to make a formal statement on their $6bn petrochemicals project in Qatar until Ramadan ends in mid-September.
[The exit] strengthens the case for national oil companies to become more self-reliant
Highly-placed sources in Qatar says the pair have agreed not to move ahead with the scheme, and that other international firms are circling the project, trying to position themselves to develop the schemes.
If the two companies confirm that Exxon is pulling out, the move will mark the fourth time an international oil company has left a major multibillion dollar scheme in 2010.
The reasons behind the exits are diverse. The US’ ConocoPhillips left the $10bn Yanbu refinery development in Saudi Arabia and similarly valued Shah gas development in Abu Dhabi in April as part of a change in strategy.
The UK’s BG Group quit its Block 60 exploration and production concession in Oman in May, apparently to focus on other schemes.
If Exxon leaves the Qatar scheme, it will be because of a dispute between the US major and QP over sales agreements for liquefied natural gas. Each case marks another hammer-blow for the credibility of international oil companies (IOCs) in the region, and strengthens the case for the region’s national oil companies (NOCs) to become more self-reliant.
IOCs executives have long argued that their superior experience, technology and management structures have meant that the region’s state-owned producers need them as partners on major new schemes. This also means that IOCs get access to the oil and gas produced by the biggest reserve holders in the world.
But the NOCs do not need the money. They are building their own in-house ability to run projects, and can get access to technology. If their international counterparts continue to leave projects, they may well find that they never come back.