Halul oil storage tanks

Qatar Petroleum

The state-owned Qatar Petroleum, formerly known as Qatar General Petroleum Corporation, supervises all oil and gas sectors since its establishment in 1974.  Its paid up capital is QR 10 billion, while its authorized capital is QR 20 billion.

Qatar Petroleum owns the majority of shares in several Qatari companies working in this field.

It also supervises different development projects in the North field, the production of liquefied natural gas, petrochemicals, a condensates refinery, and other related projects including a power station.

Qatar Petroleum alone produces 61 % of the gross output of crude oil from Dukhan, Maydan Mahzam and Bul Hanine fields located offshore in Qatari territorial waters.

An oil rifinery

Increase of production and development are being undertaken under Development and Production Sharing Agreements concluded between Qatar Petroleum and major international partners such as Maersk, Occidental, BP Amoco, Agip, Totalfinaelf, Chevron and Penzoil.

The judgment rendered by the International Court of Justice concerning the territorial dispute between Qatar and Bahrain enabled Qatar Petroleum to set detailed plans to drill oil and gas in offshore areas, particularly the gas fields in the areas 3 and 4 close to al Shamal field.

Qatar Petroleum anticipates changes in its revenue patterns with income from gas exceeding that from oil.

Onshore operations

Qatar Petroleum onshore reserves are estimated at 1,842 million barrels of crude oil and about 198 million barrels of condensates. Gas reserves amount to nearly 8 trillion cubic feet. 12 million barrels of condensates were produced at the Arab D Project for gas recycling.

Offshore operations

Offshore reserves are estimated at 496.5 million barrels of crude oil and 189.3 million barrels of condensates. Associated gas reserves exceed 5,261 trillion cubic feet. Present estimations indicate the possibility of extracting nearly 106.7 million barrels of condensates.

Major fields

Currently there are seven fields, which are under various stages of development by these companies namely:

Idd El Shargi North Dome, Idd El Shargi South Dome, Al Shaheen, Al Rayyan, Al Khaleej & Al Karkara, the first area in the North West, and the second and the fifth areas.

Idd El Shargi

According to an agreement with Qatar Petroleum, Occidental Petroleum undertook the responsibility for developing and drilling in this field since 1994 in the North Dome, and since 1997 in the South Dome. Production capacity increased to 210,000 barrel per day (bpd) in 2001.

AL Shaheen

In this offshore field, production started in 1996 according to a plan agreed upon between Qatar Petroleum and Maersk Oil-Qatar.

An oil facility

The field was then developed by enhancing the horizontal drilling technique and the benefit of the state-of-the art techniques that Maersk Oil developed.

The present production capacity is 120,000 bpd. Qatar Petroleum and Maersk Oil signed an agreement in 2001 to increase production capacity to 20,000 bpd by 2004.

AL Rayyan field

British Petroleum directs this offshore field on behalf of a consortium. The production capacity has been increased to 22,000 bpd.

Al Khaleej field

Totalfinaelf and its partner Ajip International manage this offshore field in accordance with a production partnership agreement with Qatar Petroleum. The field consists of nine wells with a production capacity 30,000 bpd.

Qatar Petroleum has adopted a plan to develop the field and raise its production capacity to 60,000 bpd. It is also undertaking expansion work such as building two new production platforms and a submarine pipeline to connect the platforms with the oil exporting terminal in Halul Island.

AL Karkara and A-structure

A Japanese consortium of three companies manages this filed since 1997 when a Development and Production Sharing Agreement was signed with Qatar Petroleum for 25 years. It covers petroleum deposits in Al Karkara field and A-structure in Qatar southeastern waters. 

Dukhan field

Dukhan-based on-shore facility

It is the oldest and the biggest field in Qatar. Qatar Petroleum alone is responsible for its management. It is the only onshore field in Qatar and its oil reserves are estimated at more than 2 billion barrels. Based on the levels of present production, this equals nearly the production for the coming 20 years.

Refining

Qatar Petroleum Refining Department supervises all oil refining that the National Oil Distribution Company (NODCO) used to manage in the past. The Department started the implementation of the third stage of expansion and development project which aims at increasing the refining capacity of Qatar Refinery in Mesaeed from 60,000 bpd to 137,000 barrel taking into consideration international standards to protect the environment.

Modernization and expansion operations include the increase of the capacity of refining crude oil and the addition of cracking units Chlorofluorocarbon (cfc) to convert most produced fuel oil into medium and light products with high financial returns, in addition to making the production pattern more compliant with the new techniques and international standards.

The project aims at satisfying the increasing domestic demand for medium and light petroleum products, especially gasoline. It aims also at providing substitutes to meet the local need for condensates in addition to improving the economics of refining operations and increasing profits.

Storing and exporting

Mesaeed oil refinery

Oil from the onshore operations is stored in Mesaeed berth before export. But oil from the offshore operations is kept in tanks in Halul Island.  The storage operations are overseen by the Refining Affairs Department at Qatar Petrolium.

Mesaieed port

It is dedicated to the storage and the exportation of the oil produced in Dukhan offshore field and natural gas liquids. The Directorate of Mesaieed industrial city is in charge of the terminal which provides support offshore and onshore services for companies, tankers, maritime operators, as well as all export activities.

Treatment of oil leaks and slicks is carried out using state of the art technologies. The terminal comprises a quay used for loading ships with natural gas liquids, and a 212 meter long and 131 meter deep wharf for exporting petroleum refiners.

• Halul Island

  Halul Island serves as a storage area

It is the center where the Qatar offshore oil is stored and exported. It has an area of 1.5 sqkm, and it comprises nine huge storage tanks and pumping stations, a power generator, water desalination stations and a helipad. Beside all this there are the houses  and entertainment facilities for the 500 Qatar Petroleum and contractor’ staff  who live there.

Projects and objectives

By the end of 1994, Qatar Petroleum embarked on an investment program aimed at increasing production capacity of onshore and offshore fields to more than 900,000 barrels per day by year 2001.

However the plan was modified during the final quarter of  2000 to raise production to 1,05 million barrels per day by the end of 2005.

Among QP projects under implementaion:  

• The modernization and expansion of refineries to reach a treatment capacity of 137,000 barrels per day.
   
• The addition of cfc cracking units to convert most produced fuel oil into light and medium petroleum products that generate higher revenues.
   
• The establishment of a refinery for condensates with a capacity of 146,000 barrels per day.
   
• The development of drilling plans in onshore and offshore areas and increasing the capacity of storage tanks.
   
• Drilling horizontal wells for reservoirs under development.
   
• Activating old wells through gas injection.
   
• Raising oil production capacity, increasing extractable reserves and optimizing utilization of the huge gas reserves.

The strategic objectives that QP intends to achieve during the coming years are:

• To realize financial return through operations aimed at diversification of national income resources.
   
• To establish an organization with adequate expertise and know how that is capable of competing in the world market.
   
• To speed up Qatarization of jobs and put emphasis on training Qataris to do technical jobs.
   
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One of the offshore platform operations

The energy sector in the state of Qatar witnessed a quantum leap when in 1971 huge reserves of natural gas were discovered at the depth of 15 - 70 meters in Ash-shaml (North) Field.

Afterwards, the government drew up a strategic plan to utilize this wealth and to build an industrial zone to accommodate gas-based industries, including gas liquefaction, processing and export, petrochemical industries and refining of condensate.

The first fruit of that plan was the construction of one of the world’s largest LNG exporting facilities: Ras Laffan Port. By December 1996 the first shipment of LNG left Ras Laffan Port.

Production from the Ash-shaml Field started in 1991, through Phase 1 of  the Alpha Project. In 2000 the total production of the Alpha Project stood at about 800 million cubic feet and about 50.000 barrels of condensates.

Production Doubled

Gas production doubled 4 times in the 90’s to record the fastest growth rate in the region. 

LNG undergoes a process of compression and liquefaction

This reflected positively on the country’s economy, and consequently, the International Monetary Fund (IMF), which Qatar joined in 1972,  classified Qatar among the “fastest growing economies in the world”.

Qatar today is the world’s third largest producer of processed gas after Iran and Russia, and is aiming to be the largest producer of LNG worldwide.

The country’s natural gas reserves are mainly concentrated within four deposits in the Ash-shamal Field, which was discovered in 1971 while the Royal Dutch Shell Company was exploring in the Gulf waters.

Colossal reserves

Recent studies carried out by “Qatar Petroleum” have shown that the Ash-shamal Field reserves are in excess of 900 trillion cubic feet (tcf), while extractable reserves are over 380 trillion cubic feet (tcf), which is 9 times the previous estimations. 

This is enough to keep Qatar a major producer of gas for 260 years at the rate of 10 billion cubic feet a day and about 400 thousand barrel per day (bpd)  of condensates, or 50 million metric tons a year of NGL.

Qatar's exports of LNG increased in the year 2000 to 18 million tons, and will reach 40 million tons in 2010, thus putting the country at the top of gas exporting league. 

Ash-shamal gas field

Most of Ash-shamal Field area is located opposite the north-eastern coast of the peninsula of Qatar. 

LNG processing plant in Ash-shamal gas field

With an area of about 6000 sq km and more than 380 tcf (trillion cubic feet) of gas reserves, Ash-shamal Field is the largest single reserve of unassociated gas in the world.

Today there are three gas projects operating in Ash-shamal Field: Qatar LNG Company (Qatargas); Ras Laffan LNG Company (Rasgas) and Ash-shamal Field Alpha Project.

In the year 2000, the Alpha Project's production amounted to about 10 million barrels of condensates and 240 billion cf of gas, whereas Qatargas' production amounted to about 19 million barrels of condensates and 435 billion cf of gas; and Rasgas to 9 million barrels of condensates and 240 billion cf of gas.

Qatar invested more than $ 26 billion in LNG projects. These projects produce materials which are in high demand in world markets
such as ammonia, ethylene, polyethylene, polypropylene and polystyrene.  

Ras Laffan Industrial City

In the year 2003, Ras Laffan Industrial City entered its 6th year of operations. By 2000 around 400 shipments had been exported from the Ras Laffan port.

LNG loaded to vessels

The port of Ras Laffan has three pairs of  berths each of which is for exporting LNG; dry cargo;  liquified products and petrochemicals; and one more berth for shipping heavy equipment.

In addition to the ancillary buildings, the port has also a control tower equipped with long and short range radar, VHF coverage CH 12 and 16, and a range of meteorological instruments.

The port is on stand-by for 24 hours a day for operations and communications. The total cost of setting up the port which was inaugurated in 1996, was around $ 2 billion.   

Qatargas

Qatargas was the first LNG company to be established in Qatar in 1984. The company signed its first sales agreement in 1992 and today it produces 8 million tons of LNG a year.

This capacity is due to be increased to reach 9 million tons by 2005.

Qatargas is a joint project between Qatar Petroleum (65 %), TotalFinaElf  (10 %), ExxonMobil (10 %), Mitsui (7.5 %) and Marubeni(7.5%).

Qatargas production, separation and processing installations are located in Ash-shamal Field, about 80 km north east off shore, in an area where water is about 50 m deep.

Twenty wells were drilled in the area to produce 1450 million cf of gas and 55,000 cf of condensates daily. 

In 2001 Qatar Petroleum signed an agreement with two companies, one is Italian and  the other is Spanish to carry out a study to set up a fourth LNG production line with a total yearly capacity of 4,8 million tons. 

Ras Laffan 

Rasgas was established in 1993 as a joint project to  produce, process, liquefy and export LNG, Condensates and other hydrocarbon products.

Ras Laffan is the main port for gas tankers

The company is jointly owned by Qatar Petroleum (63%); Mobil QM Gas, a subsidiary of the American ExxonMobil, (25%), Itochuand and Nissho Iwai of Japan (4%) and (3%) respectively, and Korea Gas (5%).
 
Ras Laffan, which was established at a cost of $ 3.3 billion, is the second largest LNG producer. Currently, Ras Laffan owns 2 production lines with an annual production of 2,5 million tons, increasable to 6,6 million tons. 

In June 1997 Rasgas concluded a 25 year sale and purchase agreement (SPA) with KoreaGas to sell the Korean company 4,8 million tons of LNG every year.

A similar agreement was also concluded with  Petronet of India to provide it annually  with 7,5 million tons of LNG starting from  2003 for a period of 25 years.

Natural Gas Plant

Ras Laffan facility

Run by Ras Laffan Company, this is a joint venture between Qatar Petroleum (70%) and Exxon Mobile Corporation (30%).

The capacity of the plant is around 4,7 millioin tons per annum and 80,000  tons of high density petroleum by products per day.

The Dolphin Project

This project, which calls for $ 8 -10 billion worth of investment over six to seven years, envisages harnessing Qatari gas for GCC countries' markets and marks a big stride towards economic integration.

Qatar and UAE signed an agreement to export 300 – 600 million cubic feet of gas per day to the latter and Oman.   

Onshore and offshore fields

In addition to its offshore reserves, Qatar has abundant reserves of associated gas in its onshore fields, estimated at about 8 tcf.

According to Qatar Petroleum, associated gas reserves in the offshore fields exceed 5 tcf.

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Steel plant

The state of Qatar has made it a  priority to maximize revenue from its natural resources through modernization of industry.

This leading role attributed to industry proved to be highly viable in that industry has become the backbone of the economy, making up 50% of the gross national production (GDP). Most of the industries in Qatar are gas and oil based.
 
The economic policy aims at liberalization and diversification of sources of revenue, rather than depend on a single source, viz, oil / gas.  The value-added gas and oil projects have been given due attention. A number of industrial cities have been established in the northern and southern parts of the country. Among them are:

1-Doha Industrial Estate

Oil industry by-products

Located 10 km to the west of Doha, Doha Industrial Estate occupies 36 square kilometers. It is the site of light and medium-scale industries such as:

• Dairy and carbonated drinks
• Textiles
• Furniture
• Paints
• Detergents and plastics
• Metal and aluminum products
• Household utensils and building materials.

2-Ras Laffan Industrial City

A modern industrial city situated in the east coast, 80 km north of Doha; it has the world's largest terminal for liquid gas exportation and the complexes of “Qatar Gas” and “Ras Gas” companies.

It also has a number of new projects including a condensate refinery, a plant for  processing gas into liquids and a factory for natural gas liquids (no.5). Despite developing mainly around the exploitation of natural gas, Ras Laffan Industrial City is expected to be one of the world’s biggest multi- industrial cities in the next few years. 

3-Mesaieed Industrial City

Situated on the eastern coast of the country, 45 km south of Doha, it is considered the principal industrial city in the country, with an industrial and a commercial port as well as a main terminal for the export of oil. It boasts rich and varied basic industries like: iron, steel, oil, liquefied natural gas complexes, petrochemicals, and oil refineries.

Mesaieed Industrial City keeps expanding thanks to the growing number of industries it encompasses, such as the expansion and modernization of “Qatar Petroleum” refinery, a new petrochemical complex “Q-Chem”, Qatar Phenyl Company and a factory for LNG (no.4).

Major projects at Mesaieed include:
 

Qatar Industrial Manufacturing Company  ________________________________________
Qatar Fertiliser Company Qafco) ________________________________________
Qatar Petrochemical Company (Qapco) ________________________________________
Qatar Fuel Additives Comanpy (Qafac) ________________________________________
Qatar Lubricants Company (Qalco) ________________________________________
Qatar Chemical Company (Q-Chem) ________________________________________
Qatar Steel Company (Qasco) ________________________________________
Qatar Vinyl Company (CVC) ________________________________________
QP's NGL plant and support facilities  Qatar Petroleum Refinery (formerly NODCO) ________________________________________

As part of a comprehensive industrial master plan, the government has decided to invest QR 400 million to develop Mesaieed. The master plan has separate zoning for petrochemicals, metallurgy, light and support industries. MIC follows strict environmental regulations which apply to all industries in the area.

Downstream Industries

This sector which includes chemical fertilizers and petrochemical industries, plays a key role in bolstering the national economy, hence the government gives it special attention.

Qatar Petroleum, a state-owned company, supervises and controls exploration, drilling and gas and oil production. Likewise it participates in the marketing and exportation of crude oil, natural gas liquids, liquefied gas, refined oil products, petrochemicals and chemical fertilizers. The companies operating in this sector are:

Qatar Industrial Manufacturing Company

Established in 1990 with a capital of QR 200 million, the company  invests in the services sector in addition to engaging in industrial ventures such as mining, plastics,  paper, food, chemicals. . The total investments of the Company reached QR 320 million by 2000, and its net profit stood at QR 22 million. 

Qatar Fertiliser Company (QAFCO)

Fertilisers Production   Plant

It was founded in 1969, and is jointly owned by Qatar Petroleum, holding a 75% share, and Norsk Hydro, holding a 25% share.

QAFCO is the largest fertilizer producer in the Middle East, with a production capacity that reached  by the end of the year 2000 around 2000 tons per day of ammonia and 3000 tons per day of urea.

Its expansion project is expected to maximize production capacity, raising it to 2 million tones per annum (tpa) of ammonia and 2,8 million  tpa of urea.

QAFCO’s principal Urea and Ammonia markets are East and South East Asia. However these products are exported worldwide to 25 countries.  

Qatar Petrochemical Company (QAPCO)

Steel production - a process with a high energy requirement

In 1997, the company undertook a major strategic review and put in place a ten year investment programme. The first step in this regard was the Government's buyout of the remaining 30 % stake from Kobe Steel and Tokyo Bokei.

The program provided for $ 1,75 billion investment in the ten-year period to increase both the volume of production and the range of products. This was to allow QASCO to use the latest technology to develop a range of value added products.
 
Qatar Vinyl Company (QVC)

It became operational in 2001. QVC is jointly owned by Qatar Petroleum (25.5 %), QAPCO (31.9%), Norsk Hydro (29.7 %) and Elf Atochem (12.9 %). It manufactures Caustic Soda (NaOH), 290.000 tpa, Ethylene Dichloride (EDC), 175.000 tpa and Vinyl Chloride Monomer (VCM), 230.000 metric tpa. East Asia is its principal market.

Qatar Petroleum Refinery (Formerly NODCO)

It is a subsidiary of QP. The refinery was inaugurated in 1974 with a total capacity of 6200 barrels per day (bpd). In 1984 a second refining unit was built with a capacity of 50,000 bpd. Its capacity was raised from 62, 000 (bpd) in 1999 to 137,000.

The expansion plan included building two new refining units to refine condensates. The objective is to meet domestic demand for refined oil-related products such as butane, premium and super gasoline, kerosene, diesel and fuel oil. Qatar-jet produces aircraft fuel.

Organic Fertilizer Plant

Commissioned in 1977, this plant processes 70 tons of refuse, daily into organic fertilizer. A good amount of iron is also extracted. In 1985, the second organic fertilizer plant was commissioned raising the daily output of both plants to about 300 tons. 

Work on setting up a new organic fertilizer plant began in 2001, with a production capacity of 1000 tons a day. 

Qatar Plastic Products Company

A joint venture where QIMCO, QAPCO and the Italian company Febo, hold equal shares. Total investment in this project is QR 32 m. It uses highly sophisticated machinery to produce plastic ware according to international standards.

Qatar Nitrogen Company: a joint venture between Qimco and QP with each holding a 50 percent stake. It was founded in 1999 to produce
both gaseous and liquid nitrogen in Messaieed.

Small and Medium Industries

Small industries are those where investment does not exceed QR 5 million. Medium ones are those with capitals ranging from QR 20 million to QR 5 million. By this measure, Qatar counts 50 medium scale industries and 264 small ones.

These companies are involved in areas such as food, beverages, tobacco, weaving and textile industries, timber, furniture, paper, printing and publishing, metall basic industries and production of oil, coal, plastics and rubber.

Despite their small capital, these industries absorb 69.1% of the labor force in the industrial sector.

Qatar National Cement Company (QNCC)

Production at QNCC started in 1969 with an annual output of 100,000  tons. After the implementation of two expansion projects in 1974 and 1976 the company's annual output increased to 300,000 tons of ordinary cement and 30,000 tons of unslaked lime.

In order to meet the increasing demand on cement arising from construction boom, a QR 500 million fully-integrated cement plant was established and inaugurated by His Highness the Emir in 1997. It has a daily output of 2,000 tons of clinker and 67,000 tons of ordinary and salt resistant cement.

The company's production in 1999 reached 777,800 metric tons of ordinary cement, 180,800 metric tons of salt resistant cement and 19,200 metric tons of unslaked lime.   

Qatar Flourmills Company

Qatar Flourmills Company was established in 1969 to satisfy the local demand for flour. It started with and annual output of 1000 tons of wheat, and gradually annual production rose to reach about 1700 tons. The capacity of the company's silos is currently 165,000 tons.  

Aluminum Plant

In 1997 a memorandum of understanding  was signed by QP and the Norwegian Company Norsk Hydro to study the feasibility of an aluminum smelter with annual output of 237,000 tons.

Industrial Development

Steel  exporting

Industrial Licenses

The government offers long term loans at low interest to entrepreneurs. According to the Law on Industrial Organization, industries whose capital is not more than QR 20 million are eligible to loans. Industries whose capital is more than QR 10 million may benefit from government soft loans following a feasibility study of the project.

Tax Exemption

Law No. (11) issued on 14 July 1993 on income tax is designed to encourage foreign capitals to enter into joint ventures in the country. The Law provides for a Committee to be formed to evaluate applications for tax exemption regarding projects executed by foreign or Qatar companies or individuals.

The main attributes considered by the Committee when assessing projects for tax exemption are:

-That the projects contribute to the consolidation of industry, agriculture, trade, oil, mineral, tourism, communications, land reform, or any other activities or enterprises that the country stands to benefit from both economically and socially.

Plots of Land

The government grants the required plots of land necessary for industrial projects with long-term licenses and nominal lease rates. The area of the plot granted is commensurate with the size and the type of the project. 

Services

The Industrial Estate provides electricity and water services at subsidized rates, an incentive highly appreciated by both existing and upcoming industries, especially those dependant on gas as a means of power or as a raw material.

Duty Free

Industries are exempt from customs duties on the following imports:

-Imported machinery, equipment and spare parts.

-Primary or semi-manufactured materials necessary for production but not available in local market.

-Exemption of domestic exports from taxes and levies.

Protective tariff

The majority of goods are subject to a certain percent ad valorem customs duty. However, certain goods which compete with locally manufactured products are subject to a higher customs duty tariff as a protectionist measure.

Industries in the country can get similar protection according to Law No. 7 issued in 1989 which is related to the unified system of protecting industrial goods manufactured in GCC countries.

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