Companies

CNOOC offloads Qatari license stake

By Robert Tuttle and Ying Wang (China Daily)
Updated: 2011-05-31 11:15

DOHA, Qatar/BEIJING - CNOOC Ltd, China's biggest offshore oil producer, sold a 25 percent stake in a license to explore for hydrocarbons in Qatar to Total SA of France as the Chinese company seeks to reduce risk.

The Beijing-based producer, which secured rights to the offshore concession two years ago, will retain a 75 percent stake and operate the area called Block BC, according to a statement on Sunday.

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Qatar, the world's biggest exporter of LNG, has awarded three exploration and production licenses in the past two years as it seeks to raise output outside the North Field, the world's biggest gas reservoir. The Persian Gulf sheikhdom has ordered a halt in new development at the field until at least 2014.

"Total has been a strong partner of CNOOC and has rich experience in oil and gas exploration," CNOOC said. "Through this transaction, both companies will share exploration risks and further strengthen cooperation."

The company signed a 25-year agreement for Block BC, its first exploration venture in the Middle East, with Qatar Petroleum in August 2009. It said at the time it would invest at least $100 million and drill three wells in five years.

JX Nippon Oil & Gas Exploration Corp signed a 30-year contract with Qatar Petroleum earlier this month to explore for gas off the emirate's northeastern coast, in an area called Block A.

China National Petroleum Corp and Royal Dutch Shell Plc reached a 30-year agreement in May 2010 to explore Block D.

Total has stakes in four Qatari gas-liquefaction plants, called trains, and a linear low-density polyethylene plant owned by Qatar Petrochemical Co and Qatofin Co, which also has part of a 1.3 million tons-a-year ethane cracker.

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