Qatar to Lift North Field Moratorium

Qatar Petroleum is ending its moratorium on further work on its giant North Field, which – known in Iran as South Pars – is the world's largest dry gas field.

It is to develop a new gas project in the southern sector that will add 2bn ft³/day to the country's export output, it said April 3. It will start work on the project’s details over the next few months, it said, without saying if it would invite any partners.

The announcement is further good news for LNG buyers in Asia and elsewhere worried about the long-term availability of low-cost gas and bad news for Iran, expecting the reservoir pressure to drop considerably by early next decade. At the moment Qatar produces 77mn mt³/yr of LNG for export.

Qatar Petroleum's CEO Saad Sherida Al-Kaabi said: "Qatar Petroleum’s technical studies and assessment of the North Field have confirmed the potential for developing a new gas project that can be targeted for export with a capacity of about 2bn ft³/day. It is worth noting that a project of this size will increase the current production of the North Field by about 10%.”

Al-Kaabi said that QP has been "conducting extensive studies and exerting exceptional efforts to assess the North Field, including drilling a number of appraisal wells to better estimate the Field’s production potential, which enabled us to reach this satisfactory result today." 

According to Qatar daily The Peninsula he told journalists: "The decision today was based on results from tests we ran on the technical capability of the field. The area we are developing is in the absolute south of the North field. It is the furthest project from the Iranian border.”

In a statement he said the decision would contribute to the "pivotal role of the country's oil and gas industry as the mainstay of the national economy. This, in turn, will contribute to and stimulate the economy in both the public and private sectors as part of the comprehensive development of the country and the achievement of the objectives of Qatar National Vision 2030."

Commenting on the unexpected news, Wood Mackenzie said: "With global activity levels and costs low, now is a good time to add new capacity, even if the LNG market does presently look over supplied. By the time new capacity is commissioned, in five-seven years' time, new pre-final investment decision LNG supply is likely to be required in the global market. But it is also a threat to other developers of new capacity worldwide, as Qatar can add new capacity at a lower cost than anybody else. Any development of the North Field is likely to have a strong liquids component.

"Saad al-Kaabi, the new CEO of Qatar Petroleum, continues to shake things up. Today's decision follows moves to merge Qatargas and RasGas, re-integrate Qatar Petroleum International and take over Qatar's petroleum product marketing."

William Powell