Qatar Petroleum

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Qatar Petroleum
Type State-owned corporation
Founded 1974
Headquarters Doha, Flag of Qatar Qatar
Key people Abdullah Bin Hamad Al-Attiyah, Chairman
Youssef Hussain Kamal (Vice Chairman)
Industry Oil & Gas
Products Oil (fuels, lubricants)
Natural Gas (LNG)
Petrochemicals
Operating income QAR 77,944,730 thousand (2005)
Net income QAR 66,520,235 thousand (2005)
Subsidiaries Gulf Helicopter Co.
Qatar Petrochemical Co.
Industries Qatar Q.S.C
Qatar Terminal Co. Limited
Website www.qp.com.qa

Qatar Petroleum (QP) is a state owned petroleum company in Qatar. The company operates all oil and gas activities in Qatar, including exploration, production, refining, transport, and storage. QP's Chairman Abdullah Bin Hamad Al-Attiyah, is also the head of the Ministry of Energy and Industry and, as of April 2007, the Deputy Prime Minister of Qatar. QP’s operations are therefore directly linked with state planning agencies, regulatory authorities, and policymaking bodies. Together, revenues from oil and natural gas amount to 60% of the country’s GDP. Currently it is the third largest oil company in the world by oil and gas reserves.[1]

Contents

[edit] Early history

After World War I and the collapse of the Ottoman Empire, Qatar fell within the British sphere of influence and the first onshore oil concession in Qatar was awarded in 1935 to British Petroleum's predecessor, the Anglo-Persian Oil Company (APOC). APOC created a subsidiary, Petroleum Development (Qatar) Ltd. (PDL), to operate the concession. PDL was later renamed the Qatar Petroleum Company (QPC). The first well, Dukhan 1, was drilled in 1939. World War II delayed development until 1947 and the first crude exports occurred in 1949. The first offshore concessions were granted in 1949 to two U.S. companies, the Superior Oil Company and the Central Mining & Investment Co. In 1952, the Shell Company-Qatar (SCQ) acquired exploration rights to most offshore territory. In 1960, the Idd Al-Shargi and Maydan Mahzam fields were discovered. The largest offshore field, Bul Hanine, was discovered in 1970 and came onstream in 1972. Qatar Petroleum was created in 1974 following the government's nationalization of the oil sector. In 1973, the state took a 25% stake in onshore concessions of QPC and offshore concessions of SCQ. Early in 1974, the state increased its share in both companies to 60%. In 1976, QP took full control of QPC's onshore concessions and SCQ's offshore activities the following year.

[edit] Natural gas

The North Field was discovered in 1971. Although its significance was not immediately apparent, subsequent drilling revealed over 900 tcm of natural gas reserves, the largest non-associated natural gas field in the world. Gas associated with oil production and non-associated gas from the Cap and Khuff fields was critical to Qatar's industrialization. Initially, this involved steel, cement, fertilizers, petrochemicals, water desalination and power generation. Natural gas production grew significantly during the last decade. In 2005, Qatar produced 1,536×109 cu ft (43,500,000,000 m³) of natural gas, more than three times the 1995 output of 477×109 cu ft (13,500,000,000 m³). Qatar’s proven natural gas reserves stood at 910.5 tcf as of January 2007, the third-largest in the world behind Russia and Iran. During 2005, the country exported 987×109 cu ft (27,900,000,000 m³) of LNG. Condensate and NGL production in 2006 together averaged 285,000 bbl/d (45,300 m³/d).

[edit] Natural gas development

Qatar's great wealth is most visible in its capital, Doha.
Qatar's great wealth is most visible in its capital, Doha.

With falling oil and associated gas production, and depletion of the Khuff reserves, developing the North field became imperitive. In 1984 and it was decided that development would occur in phases. Phase 1 involved installing production, processing, and transport facilities for 800 mcfd to serve local utilities and produce 5,000 tons per day of propane, butane, gasoline, and naphtha. In 1989 a gas sweetening plant and sulfur processing unit were added. Phase one was online by early 1991. Phase two was expected to involve selling North Field gas to its neighbors, possibly through a Gulf Cooperation Council (GCC) gas grid. Phase three involved exporting to Europe and Asia. Even before the Gulf War, this phase ran into trouble. To justify the investment, QP needed two large-scale long-term supply contracts. Despite efforts from QP managing director Jaber al-Marri, contracts were not forthcoming. This switched emphasis to domestic outlets. In 1988, a firm of international consultants presented a plan to QP for developing domestic projects to utilize Qatari gas. Suggestions included an aluminum smelter, a ferro-alloy production plant, methanol production facilities, and expansion of petrochemical and fertilizer operations. In 1997, Qatar began exporting LNG when it sent 5.7 bcf of LNG to Spain. In 2005, Qatar exported 987×109 cu ft (27,900,000,000 m³) of LNG. Of this, 316×109 cu ft (8,900,000,000 m³) went to Japan, 293×109 cu ft (8,300,000,000 m³) to South Korea, 213×109 cu ft (6,000,000,000 m³) to India, 161×109 cu ft (4,600,000,000 m³) to Spain, and 3×109 cu ft (85,000,000 m³) to the United States. In 2006, Qatar surpassed Indonesia as the world’s largest LNG exporter. In March 2007, QP solidified its leading role when RasGas completed its fifth LNG production train, giving the country 1.5 Tcf of annual liquefaction capacity, the most in the world.[2]

[edit] Exploration and production

QP's target production for 2012 is about 8.7 Tcf, nearly six times greater than 2005. The expected increase will fuel growing requirements of domestic industry, LNG export, exports through the Dolphin pipeline, and several gas-to-liquids projects. In 2005, Qatari government officials became worried that the North Field’s reserves were being developed too quickly, which could reduce pressure in the field’s reservoirs and possibly damage its long-term production potential. In 2005, the government placed a moratorium on North field development projects pending assessment. However, this freeze did not affect projects already approved or underway. In November 2005, ExxonMobil started production at the Al Khaleej block (North Field) at 750 MMcf/d. In July 2006, they announced plans to expand to 1.6 Bcf/d by 2009, which will be used to fuel power plants and industrial customers in Ras Laffan, RasGas, and as feedstock at the Oryx GTL Project.

[edit] Oil operations

Qatar is OPECs smallest oil producer, though it remains an important supplier to world oil markets. In 2006, Qatar produced 1.1 mmbpd of total oil liquids (815,000 bpd was crude oil). Qatar also produced an estimated 250,000 bbl/d (40,000 m³/d) of NGLs and 35,000 bbl/d (5,600 m³/d) of condensate, which are exempt from the country’s OPEC production quota. Qatar’s proven oil reserves were 15.2 Gbbl (2,420,000,000 m³) as of January 2007.

In 1991, Qatar Petroleum initiated an upgrade program for oil production facilities. The program included bringing the Diyab structure (Dukhan) online and enhanced oil recovery (EOR), particularly at the Dukhan field. QP expects to boost capacity at Dukhan from 335,000 bbl/d (53,300 m³/d) in 2006 to 350,000 bbl/d (56,000 m³/d) in 2008. QP is carrying out similar work at several smaller fields, including the offshore Bul Hanine and Maydam Mahzam. Prospects for new discoveries are limited. QP carried out much exploration activity during the early 1980s but exploration declined as the oil glut of the mid-1980s gathered pace. Since then, QP has encouraged foreign operators to apply for exploration licenses. Although the number of wells drilled grew significantly towards the end of the 1980s, there was little success. Most new E&P is done offshore by international oil companies, including ExxonMobil, Chevron, and Total. While substantial E&P is underway, there have not been any major oil discoveries in Qatar during the last decade. Most anticipated new oil production will come from Maersk (Denmark), which operates the Al Shaheen field. Maersk reached an agreement with Qatar Petroleum in December 2005, under which the company intends to drill more than 160 production and water injection wells and establish three offshore platforms. The total oil production from Al Shaheen is planned to be gradually increased from 240,000 bbl/d (38,000 m³/d) at the beginning of 2006 to 525,000 bbl/d (83,500 m³/d) by the end of 2009.[3] When completed, Qatar would have more than 1.1 mbpd in crude production capacity.

[edit] Pipelines, exports and refineries

QP operates Qatar’s oil pipeline network, which transports supplies from oil fields to the country’s lone refinery and export terminals. QP operates an expansive offshore pipeline network that brings crude oil from offshore oil fields to Halul Island, where oil can be processed for export. Onshore, most oil is sent to Umm Said for refining or export. Qatar has three primary export terminals: Umm Said, Halul Island, and Ras Laffan. Qatar typically exports around 600,000 bbl/d (95,000 m³/d) of crude and about 20,000 bbl/d (3,200 m³/d) of refined petroleum products. Most exports go to Asia, with Japan as the single largest receiver (about 380,000 bbl/d (60,000 m³/d) of crude in 2006). In the international market, the major customer’s are Emirates National Oil Company (ENOC), Glencore, Bakhri Trading, VITOL, Mitsui and ITOCHU.

Refining is carried out by the National Oil Distribution Company (NODCO), a subsidiary of QP established in 1968. Qatar's first refinery was built in Umm Said in 1953. A second refinery was completed in 1974. By the early 1980s, growth in local consumption was such that Qatar began importing refined products. In 1983, a 50,000 bbl/d (7,900 m³/d) refinery came online at Umm Said. Currently, Umm Said has a refining capacity of 137,000 bbl/d (21,800 m³/d). QP is also building another refinery, which will have the capacity to run 146,000 bbl/d (23,200 m³/d) of condensate. Marketing and commercial aspects for the export of the Refinery Products are entirely controlled by the Qatar Petroleum Marketing Directorate.[4]

[edit] Dolphin Project

Qatar Petroleum is part of the Dolphin Gas Project, which connects the natural gas networks of Oman, the United Arab Emirates, and Qatar with the first cross-border natural gas pipeline in the Gulf region. The project is being developed by Dolphin Energy, a consortium owned by Mubadala Development on behalf of the Abu Dhabi government (51%), Total (24.5%), and Occidental Petroleum (24.5%). The Dolphin Project made significant progress in 2006. Construction was completed on all the project’s upstream and downstream components by year-end except the gas processing plant located at Ras Laffan. A company spokesperson announced in March 2007 that it tested receiving and distribution facilities in the U.A.E., and expected to begin operations in June 2007. The 260-mile (420 km) long Dolphin Energy Pipeline currently sends 400 MMcfd of natural gas supplies from the North field to markets in the U.A.E and Oman.[5]

[edit] Gas-to-liquids

GTL projects received significant attention in Qatar the last several years, and Qatar’s government originally set a target of developing 400,000 bbl/d (64,000 m³/d) of capacity by 2012. However, cancellations and delays substantially lowered this. In February 2007, ExxonMobil canceled its Palm GTL project, which was slated to produce 154,000 bbl/d (24,500 m³/d). The company will instead develop the Barzan Gas Project, scheduled to supply 1.5 Bcf/d by 2012. The Oryx GTL plant is a joint venture of QP and Sasol-Chevron GTL, and has a 34,000 bbl/d (5,400 m³/d) capacity. The plant was commissioned in June 2006, but technical problems prevented the consortium from loading the first export until April 2007. In February 2007, Shell held a groundbreaking ceremony for its Pearl GTL Project. The Pearl plant will be 51%-owned by QP, though Shell will operate the project with a 49% stake. The facility is expected to use natural gas feedstock to produce 140,000 bbl/d (22,000 m³/d) of GTL products. The project will be developed in phases, with 70,000 bbl/d (11,000 m³/d) capacity expected by 2010 and a second phase expected in 2011. The Pearl project will be the first integrated GTL operation in the world, meaning it will have upstream production integrated with the onshore conversion plant.[6]

[edit] Subsidiaries

[edit] Qatar Petrochemical Company

Qatar was the first Gulf state to build its own petrochemical industry. The Qatar Petrochemical Company (QAPCO) was established in 1974 as a joint venture between QP (84%) and CdF (Chimie de France) and began production of ethylene, low density polyethylene, and sulfur in 1981. In August 1990, QP's interest in QAPCO was reduced to 80%, with the remaining 20% split equally between Enimont (Italy), and Elf Aquitaine (France) through its Atochem subsidiary. The importance of reliable gas supplies was demonstrated in the early years of QAPCO, which were marred by shortages of ethane feedstock arising from fluctuations of associated gas production along with movements of oil pricec. QAPCO's facilities consist of an ethylene plant producing 525,000 metric tons per annum (MTPA), two low density polyethylene (LDPE) plants with 360,000 MTPA and a sulphur plant with 70,000 MTPA. Shareholders are now Industries Qatar (80%) and Total Petrochemicals (20%).

[edit] Qatar Fertiliser Company

The Qatar Fertiliser Company (QAFCO) was founded in 1969 as a joint venture between the Qatari government, Norsk Hydro Norway, Davy Power and Hambros Bank, to produce ammonia and urea. The company is now owned by Industries Qatar (75%) and Yara International (25%). QAFCO inaugurated its first plant in 1973 with a design daily capacity of 900 tons of ammonia and 1000 tons of urea. The QAFCO complex in Mesaieed City comprises four completely integrated trains; each train is made up of two units, one for production of ammonia and the other for urea, besides a urea formaldehyde unit. QAFCO total annual production capacity now is 2.0 MMT of ammonia and 2.8 MMT of urea, making QAFCO the world’s largest single site producer of urea.[7]

[edit] Other subsidiaries

[edit] Notes

  1. ^ "Oil and Gas Reserves by Country or Company", Data360.
  2. ^ EIA Qatar (2007)
  3. ^ Maersk Annual Report 2005
  4. ^ Qatar Petroleum Annual Report 2005
  5. ^ Occidental Petroleum Annual Report 2005
  6. ^ N. Fabricius (2004)
  7. ^ Qatar Petroleum Annual Report 2005

[edit] References