Under the agreement, the partners will jointly explore for natural gas in Block D which covers an area of 8,089 km2 onshore and offshore Qatar, and is located close to Ras Laffan.
The deal further marks China presence on the world stage, acquiring foreign energy assets to feed it’s growing hunger for energy that its rapid industrialisation has brought. China has also been making inroads into the under developed Iranian gas fields, winning contracts to exploit the South Pars gas field where major European companies daren’t go due to sanctions.
Mr. Zhao Dong Chief Financial Officer of PetroChina International Investment Company Ltd. said, “We already enjoy a relationship with Qatar Petroleum and Shell and I am delighted that this cooperation is now extending to work within Qatar itself. China is an important downstream market and PetroChina is keen to build upstream partnerships with major resource holders like Qatar.”
The Block D concession is for pre-Khuff geological intervals. The overlying Khuff horizon contains the super-giant North Field. Part of the Block D concession extends beneath the North Field.
The agreement is for a term of 30 years and starts with a five year first exploration period. During the exploration period, Shell and PetroChina will implement a work programme including exploration technical studies, 2D and 3D seismic acquisition, processing, re-processing and interpretation, and drilling a number of exploration wells to the pre-Khuff formation.
Shell, as operator, will hold a 75% equity share with PetroChina holding a 25% share.
Shell and PetroChina will produce the natural gas under Qatar Petroleum’s supervision. Under the agreement Qatargas will be the off-taker of any potential gas produced.
Abdulla bin Hamad Al-Attiyah, Minister of Energy and Industry said, “This new agreement is part of QP’s plans to… increase the country’s hydrocarbon reserves base, oil and gas production potential and further strengthen Qatar’s economy. This is the second Qatar agreement dedicated to exploring hydrocarbons from the deep pre-Khuff reservoirs. QP is also preparing for additional pre-Khuff reservoir exploration tenders in the near future.”