The story
History
Establishment
After World War I and the collapse of the Ottoman Empire, Qatar fell within the British
sphere of influence and the first onshore oil concession in the country was awarded on 17 May 1935 to British Petroleum's predecessor, the Anglo-Iranian Oil Company (AIOC). Because of its obligations under the Red Line Agreement, AIOC on 3 October 1936 transferred the concession to an associate company of the Iraq Petroleum Co., Petroleum Development (Qatar) Ltd. which would operate the concession. In October 1938, Dukhan No. 1 was spudded and in January 1940 struck oil flowing at 5,000bpd at a depth of 5,685ft. Three wells were drilled, 1 dry (struck water in May 1942) and 2 producers (ca. 5,000bpd each; #2 completed March 1941). However, World War II delayed development, the wells were plugged out of fear of them falling into the hands of Axis forces. Drilling resumed at the end of 1947 (at year's end Dukhan No. 4 was at 5,000 ft; the 2 wells plugged during the war were reopened in 1948) and the first crude was exported in December 1949 with the completion of a 73-mile 14-inch pipeline (69.7 mile 100,000bpd pipeline, consisting of 17.9 miles 12+3⁄4-inch and 51.8 miles of 14+1⁄2-inch pipe; the pipe manufactured in France, the pipeline designed by H. S. Austin who had been in charge of the Kirkuk-Haifa oil pipeline). The line led from the field on the west coast across the peninsula to the loading dock on the east coast at Umm Said, where two twin 16-inch 4,200 ft sea loading lines reached into deep water. The French tanker President Meny departed with the first load of oil on 31 December 1949. At the time there were at Umm Said 5 93,000bbl tanks, 5 130,000bbl tanks and 5 tanks of 148,000bbl each (1,855,000bbl total).
The first offshore concessions were granted in 1949 to the International Marine Oil Company (IMOC), which was a subsidiary of Superior Oil and the London-registered Central Mining & Investment Co. Superior was previously active in offshore operations in the Gulf of Mexico and in Venezuela. It was the third relatively small independent American company to get involved in the Persian Gulf after the American Independent Oil Co and Pacific Western Oil Co, which were active in the neutral zone. In early 1950 a controversy was settled between IPC and Superior+Central Mining in which IPC's claim to the seabed to which they felt entitled under their original concession was in part granted with IPC gaining the rights to everything within a 3 mile belt around the peninsula while Superior's concession covered everything beyond 3 miles to a distance of 12 miles. IMOC did exploratory work in 1950 and 1951 with discouraging results and turned back the concession in 1951. In 1952, after IMOC had withdrawn, the Shell Co.-Qatar (SCQ) acquired exploration rights to most offshore territory with a concession dated 29 November 1952. In 1960 and 1963, the Idd Al-Shargi and Maydan Mahzam fields were discovered, respectively. Bul Hanine, the largest offshore field, was discovered in 1970 and began producing in 1972.
Shell employed the first offshore drilling platform (1,200 tons) in the Eastern Hemisphere in the waters to the east of Qatar. The first well, Matbach No. 1 was spudded at a depth of 32 ft of water in February 1955 and was abandoned at 6,706 ft in August 1955. The second test, Idd el Shargi No. 1 was abandoned in December 1956 at 11,883 ft. As the platform was being moved to Doha for modifications it got wrecked on 27 December – 30 December 1956, with several lives lost. A total of $21 million was invested in this endeavor at that point. The company built a new 209 ft-by-105 ft 5,930-ton platform, the Seashell, capable of drilling to 17.000 ft, in the Netherlands for $5 million. After commissioning in Doha Bay in December 1959, Shell struck oil with the new platform with Idd el Shargi No. 2 in April 1960 at about 8,000 ft, then drilled Hadet Shibeeb No. 1 (abandoned as a dry hole in September 1960) and then struck oil with Idd el Shargi No. 3, after which the Seashell was moved in March 1961 to the Idd el Shargi No. 4 location.
Worker strikes
Early strikes focused on wages and conditions, and the emir encouraged strikes when negotiating new contracts to pressure concessions from the oil company.
In August 1952, a coalition of workers presented their demands to Ahmad Al Thani, the son of emir Ali Al Thani. Their demands centered on improved working conditions, less foreigners in high-ranking positions, and increased wages. Ahmad rejected these demands, causing the workers to present their grievances to the British. But while considering the ongoing conditions in country's labour sector, the International Labour Organization (ILO) issued new reports in November 2022, detailing the results of the Technical Cooperation Programme between the Government of Qatar and the ILO since it was launched in April 2018. The annual and four-year progress reports cover the substantial efforts that have been made in the areas of labour migration governance, the enforcement of the labour law and access to justice, and strengthening the voice of workers and social dialogue. These changes have improved the working and living conditions for hundreds of thousands of workers, though additional efforts are needed to ensure that all workers can benefit.
Nationalization of oil sector
In 1973, the state seized a 25 percent stake in onshore concessions of QPC and offshore concessions of SCQ. As part of the agreement, the government stake would increase by 5 percent every year until it reached 51 percent in 1981. However, in early 1974, the initial agreement was repealed after QPC agreed to a new agreement which would allow the state to increase its share in both companies to 60 percent.
In December 1974, the government officially announced its intent to acquire SCQ's and QPC's remaining shares. A government decree passed in 1975 declared government ownership of the remaining shares. Negotiations throughout the following years resulted in the government assuming full ownership of QPC's onshore concessions in September 1976 and the SCQ's offshore activities in February 1977, thus fully nationalizing the oil sector.
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In 1991, Qatar Petroleum initiated an upgrade program for oil production facilities. The program included bringing the Diyab structure (Dukhan) online and enhanced oil recovery, particularly at the Dukhan field. QP expects to boost capacity at Dukhan from 335,000 bbl/d (53,300 m3/d) in 2006 to 350,000 bbl/d (56,000 m3/d) in 2008. QP is carrying out similar work at several smaller fields, including the offshore Bul Hanine and Maydam Mahzam. Prospects for new discoveries are limited. QP carried out much exploration activity during the early 1980s but exploration declined as the oil glut of the mid-1980s gathered pace. Since then, QP has encouraged foreign operators to apply for exploration licenses. Although the number of wells drilled grew significantly towards the end of the 1980s, there was little success. Most new exploration and production (E&P) is done offshore by international oil companies, including ExxonMobil, Chevron, and Total. While substantial E&P is underway, there have not been any major oil discoveries in Qatar during the last decade. Most anticipated new oil production will come from Maersk Oil (Denmark), which operates the Al Shaheen field. Maersk reached an agreement with Qatar Petroleum in December 2005, under which the company intends to drill more than 160 production and water injection wells and establish three offshore platforms. The total oil production from Al Shaheen is planned to be gradually increased from 240,000 bbl/d (38,000 m3/d) at the beginning of 2006 to 300,000 bbl/d (48,000 m3/d) by the end of 2009. When completed, Qatar would have more than 1,100,000 bbl/d (170,000 m3/d) in crude production capacity.
In August 2019, French multinational integrated oil and gas company Total confirmed signing deals over transferring some of its assets in Kenya, Guyana and Namibia to Qatar Petroleum. With the deals, QP will hold a 30% interest in Block 2913B and 28.33% in Block 2912 of Namibia. QP will also have 40% of the company holding Total's existing 25% interests in the Orinduik and Kanuku blocks of Guyana and 25% interest in Blocks L11A, L11B and L12 of Kenya.
On 4 March 2026, the company announced force majeure, due to the ongoing 2026 Iran war. The attacks on its Ras Laffan industrial city, caused it to halt production of LNG and associated products.
Pipeline operations
QatarEnergy operates Qatar's oil pipeline network, which transports supplies from oil fields to the country's lone refinery and export terminals. It operates an expansive offshore pipeline network that brings crude oil from offshore oil fields to Halul Island, where oil can be processed for export. Onshore, most oil is sent to Umm Said for refining or export. Qatar has three primary export terminals: Umm Said, Halul Island, and Ras Laffan. Qatar typically exports around 600,000 bbl/d (95,000 m3/d) of crude and about 20,000 bbl/d (3,200 m3/d) of refined petroleum products. Most exports go to Asia, with Japan as the single largest receiver (about 380,000 bbl/d (60,000 m3/d) of crude in 2006).
Refining operations
Refining is carried out by two refineries - QatarEnergy Refinery in Umm Said and Laffan Refinery in Ras Laffan. Besides Qatar Petroleum has two joint ventures with South African Sasol (Oryx GTL) and British Shell plc (Pearl GTL) which are producing synthetic petroleum products (GTL-naphtha, GTL-diesel) from natural gas using Gas-to-Liquids technology.
Qatar's first refinery was built in Umm Said in 1953. The first revamp of the Refinery was completed in 1974. By the early 1980s, growth in local consumption was such that Qatar began importing refined products. In 1983, a 50,000 bbl/d (7,900 m3/d) refinery came online at Umm Said. Currently, Umm Said Refinery has a refining capacity of 137,000 bbl/d (21,800 m3/d).
Laffan Refinery (RL1) came on-stream in September 2009. The Refinery has a processing capacity of 146,000 barrels (23,200 m3) per stream day and utilizes the field condensate produced at South Pars / North Dome Gas-Condensate field. After the revamp of the refinery is completed (RL2) it will have the processing capacity of 292,000 bbl/d (46,400 m3/d).
2026 Production shutdown due to military attack
On 2 March 2026, the third day of the Iran war, the Qatari Ministry of Defense announced that Ras Laffan Industrial City and Mesaieed Industrial Area were struck by two Iranian drones. QatarEnergy soon announced that it has ceased all production of natural gas and its associated products, reportedly on order by Energy Minister Saad Sherida al-Kaabi. It later announced that it was declaring Force Majeure on its contracts with buyers, and internal sources speaking to Reuters said that it would soon be shutting down gas liquefication, and that restarting it would take weeks. These announcements caused increases in world gas prices, which analysts said was a part of the Iranian government's plan to apply pressure on the world to stop the war. On 6 March, al-Kaabi warned that if the war continues other Gulf energy producers may be forced to halt exports and declare Force Majeure, and that "this will bring down economies of the world". This announcement caused a jump in global oil prices.
On 6 March, it was reported that according to satellite imagery analysis by both Bloomberg and the Energy Economics and Society Research Institute in Tokyo, Ras Laffan, the main gas facility in Qatar, appears to have not been damaged before the "unprecedented shutdown" which sent fuel prices higher.
From Wikipedia’s article on QatarEnergy, shared under CC BY-SA 4.0.4