Reports indicate that the French-based oil giant, Total, has an advantage with regards to taking a leading role in assisting Qatar raise production levels from the largest gas field in the world. This is because Total is already involved in similar activities across the border in Iran. Qatar and Iran share the same gas deposits and this now places Total in a better position than competitors such as Shell and Exxon.
The tiny resource-rich state in the Gulf announced the planned expansion of production in a bid to counter the diplomatic rift with its Arab neighbors and allies and which has led to a blockade.
South Pars field
Earlier in the month the chief executive officer of Total, Patrick Pouyanne, appended his signature on a deal aimed at developing Iran’s South Pars field. In doing so Total became the first oil giant to resume operations in Iran after sanctions were lifted. Pouyanne acknowledged that prior to working out the agreement’s details, he consulted with authorities in Qatar since it is a shared reserve.
“The Iranian block where we are supposed to produce is next to the border with Qatar. When I traveled to Doha I discussed it with the (Qatari) authorities…” said Pouyanne.
Blockade on Qatar
But while working in two nations whose gas assets are a shared resource comes with obvious economies-of-scale benefits, there are also risks for the French oil major. This is mainly because economic and political sanctions have been imposed on Qatar by Egypt, Bahrain, the UAE and Saudi Arabia over allegations that the tiny resource-rich Gulf state is courting Iran and fostering terrorism. Other than projects in Qatar and Iran, Total also boasts of projects in the UAE and Saudi Arabia.
In April, Qatar lifted a ban which had been self-imposed in the North Field. Last week Qatar indicated that it would be raising the levels of gas it produces by around 30%. This would see the country increase the quantities of natural gas it produces to up to 100 cubic meters. Observers interpreted the move as an attempt by Qatar to show strength amidst the dispute with its Arab neighbors and allies.
In the past decade natural gas projects have made Qatar and oil majors such as Royal Dutch Shell, Total and ExxonMobil billions of dollars and an expansion in capacity would make the tiny Gulf state even more dominant. Even before the output is raised, Qatar is the biggest exporter of liquefied natural gas.