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Business Stories

A Moment of Introspection

As world oil prices fluctuate, Qatar has taken decisive steps to best navigate current realities. Among the first moves, State-owned oil and gas company Qatar Petroleum (QP) has completed a reorganization that focuses on its core businesses, according to CEO Mr. Saad Sherida al-Kaabi. Speaking on 23 June, Al-Kaabi told journalists the company had decided to exit all non-core businesses.

As part of the reorganization, Qatar Petroleum International has been integrated into QP, creating one corporation responsible for Qatar’s oil and gas operations both domestically and beyond its borders.

“We are in a period of oversupply in the industry, and we need to be very efficient as an organization. While we have no control over markets and prices, we do have control over our cost and expenditure.” said Mr. Al-Kaabi.

Along with tightening their organizational structure, the company has taken several decisive steps to strengthen their foothold on the market. The company put forward

a major oilfield concession tender to exploit the Al-Shaheen offshore field, attracting several major players including Maersk (Denmark), ConocoPhillips (US), ExxonMobil (US), Shell(UK/Dutch), and Total (France).

Al-Shaheen is one of the most technically impressive fields in the world, and produces 300,000 barrels a day.

Mr. Saad Sherida al-Kaabi QP CEO

We are in a period of oversupply in the industry, and we need to be very efficient as an organization

Maersk had managed the field for the past 20 years, which posed may technical challenges, and has made it into one of the most impressively developed fields in the world. While QP has shown appreciation for the Danish company’s efforts, it is currently in negotiations to strike the best deal possible through the open tender, and the company has made every effort to ensure a transparent process. As 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, the Al-Shaheen is expected to be the country’s largest hydrocarbons deal struck this decade.

Meanwhile, QP has also worked to strengthen its position in the liquefied natural gas (LNG) market. As the sector experiences some reductions in demand from the Asian markets, the company intends to export gas to its majority-owned Golden Pass liquefied natural gas (LNG) terminal in the US, for it to then be redistributed into other North American markets with which the US has trade agreements. The company is now also working with one of its US partners ExxonMobil to construct an LNG export terminal in the state of Texas.

The country also aims to reduce waste in LNG production through the launch of the Jetty Boil-Off Gas Recovery (JBOG) project, which is set to save 1 trillion cubic feet of gas for Qatar over the next 30 years. By collecting the gas and transporting it to an area where it is compressed to be processed for use again either as LNG or fuel gas, the project is set to recover the one percent of LNG that generally evaporates when loading it onto ships. This will result in a reduction of at least 90 percent of flaring during loading at Ras Laffan, an equivalent to greenhouse gas savings of 1.6 million tons a year, or the same as could be produced  by 175,000 vehicles in that time.

Sources: Meed.com

– The Edge Magazine