Total has signed an agreement with state-owned Qatar Petroleum to create a new company which will focus on future development and operation of the $2.5bn Al-Shaheen oil field offshore Qatar.

Oil field

The new Qatari company, known as North Oil Company, will be 70% owned by Qatar Petroleum and 30% by Total.

It will be responsible for operating the Al-Shaheen concession of 25 years starting from 14 July 2017. Production from the field commenced in 1994.

Located 180km north of Doha, the field has production capacity of 300 thousand barrels of oil per day. The existing development consists of 30 platforms and 300 wells.

Total CEO and chairman Patrick Pouyann√© said: "This is an important recognition of Total’s technical and commercial competence, and the Group will deploy its best technical expertise and experienced teams to this field.

"Our contribution to the development of the Al-Shaheen field is a significant milestone in the long history of the Group’s partnership with Qatar, where for 80 years we have been active in the entire hydrocarbon value chain including oil and gas production, LNG, refining and petrochemicals."

Total said that the deal is a part of its plan to boost its presence in the Middle East by accessing fields and acquiring low-technical cost oil assets.

Qatar Petroleum president and CEO Saad Sherida Al-Kaabi said: "QP’s objective for the competitive process was to choose a partner that has world class technical capabilities that enable it to continue the development and operation of Al-Shaheen Field in partnership with QP, while at the same time ensuring the highest possible financial return to the State of Qatar."

Total will replace Danish firm Maersk, which has been operating the field since 1992.

Maersk Oil was expected to renew its 25-year production agreement on Al-Shaheen field which is scheduled to expire in 2017.

Image: The Al-Shaheen oil field offshore Qatar produces 300 thousand barrels of oil per day. Photo: courtesy of A.P. MOLLER – MAERSK GROUP.