Qatar Petroleum - History

History

During 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-Iranian Oil Company (AIOC). Because of its obligations under the Red Line Agreement, AIOC transferred the concession to an associate company of the Iraq Petroleum Company, Petroleum Development (Qatar) Ltd. (PDQ), which would operate the concession. PDQ was later renamed the Qatar Petroleum Company (QPC). In October 1938, Dukhan No. 1 was spudded and was yielding 5,000 barrels of oil per day by January 1940. However, 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.

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 Oil (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. When completed, Qatar would have more than 1,100,000 bbl/d (170,000 m3/d) in crude production capacity.