State-owned Qatar Petroleum and French energy giant Total will formally launch a 25-year joint venture to develop the Al Shaheen oil field this week.
The North Oil Company, launched on Tuesday, will be made up of a 70 percent stake from QP and a 30 percent stake from Total, which is taking over operations from Maersk Oil, according to a statement released by Qatar Petroleum.
The site it will develop is located some 80 kilometres (50 miles) off Qatar's northeast coast and lies over the North Field, one of the world's largest oil and gas fields.
The existing development consists of 30 platforms and 300 wells, and production from the field represents about half of Qatar’s total oil production.
While the contract was announced last year, the launch comes amid the worst crisis to hit Qatar, the world's largest exporter of natural gas, in years. Saudi Arabia, the United Arab Emirates, Egypt and Bahrain last month cut diplomatic, political, and economic ties with Qatar, which they accuse of supporting Islamist extremism.
Despite its regional isolation, Qatar has said it can survive what it has called a "blockade". Qatar Petroleum last week announced it would boost natural gas production by 30 percent by 2024.
Central bank Governor Sheikh Abdullah Bin Saoud al-Thani also told US media at the weekend that Qatar has $340 billion in reserves to weather the crisis.
The signing of the Total contract also comes amid reports that Saudi Arabia and the UAE may pressure international companies to either do business with them or with Qatar.
The deal comes in the same month that Total defied US pressure to sign a multi-billion gas contract with Iran on July 3, the first by a European firm with Tehran in more than a decade.
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