Al-Shaheen is likely to be Qatar’s last major oilfield concession tender and it is clear that several oil majors are going to be queuing up to win the contract.

The offshore field is large (300,000 barrels a day) and while there are several technical challenges any asset that size is always going to attract interest, whatever the oil price.

What is clear from Qatar Petroleum’s (QP’s) perspective is that it is going to be driving a hard bargain for the concession and any oil major that wins it will have to agree to terms that will be as challenging as the field itself.

Denmark’s Maersk Oil has done a fine job of dragging the field up by its bootstraps, turning it from an uneconomical asset to arguably one of the most impressively developed fields in the world.

However, the oil industry is not known for its sentimentality and QP is no different to any other national oil company. It understands that Maersk has done a good job, but it wants to strike the best deal possible and this means an open tender.

QP’s CEO, Saad al-Kaabi, is a formidable character and has the technical knowledge to match his shrewd political manoeuvering. He wants a transparent process to decide the next concession holder and also wants to ensure the best deal possible for Qatar.

Qatar’s oil sector has been very quiet for the past six years and with no real promise of further development of the North Field, the world’s largest gas field, Al-Shaheen will probably be the country’s largest hydrocarbons deal struck this decade.

QP knows that many of its low-yield oil assets could be rendered obsolete in the next five years by the relentless march of the US’ shale oil sector. It therefore needs to ensure that its larger assets are secured.

Whoever wins the concession will have to maintain Maersk’s sterling work over the past 20 years and large investment will be required to keep the oil flowing, but the 300,000 barrels of oil on offer means that this will not deter any of the majors. 

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