Last year, petroleum giant Royal Dutch Shell wanted to buy a stake in Total. It is a promising exploration isolated from South Africa. The asset’s principal shareholder used its right to hinder the deal and collected the share itself.
The reason is that Total’s plan was only to sell on Qatar Petroleum.
The quick turn of events caught some of those affected by surprise. It is according to the company sources familiar to the transaction. The of the details is not available.
For Total, it was a part of its extensive search to tighten ties with Qatar Petroleum (QP). This is an effort to protect a stake in the Gulf country’s planned expansion of its liquefied natural gas facilities.
Today, it is already the world’s largest and one of the most profitable projects in the energy sector.
The battle for a role in the project has worried numerous of the world’s largest energy companies.
The race included Exxon Mobil and Shell, which have also provided QP stakes in some of their most award-winning deals.
Energy companies see natural gas as the most minimal polluting hydrocarbon and as a key fuel in the shift for a lower-carbon economy.
In the coming decades, liquefying the gas of user countries such as India, China, and Japan lets the transportation demand for LNG to soar.
Total grips a stake in Qatar’s LNG production facilities. This is along with Shell, Exxon, and ConocoPhillips offer investors access to immense resources at the cheapest production costs.
The head of business intelligence at LNG shipbroker and consultancy Poten & Partners, Jason Feer, said, “That’s a big, chunky piece of gas reserves. If you can buy into or somehow get involved in these projects, that might help (companies) on the reserves side.”
Plans on Boosting LNG Production Starting Today
QP wants to develop its LNG production to around 110 million tonnes per annum from today’s 77 metric tonnes per annum.
In addition, creation of four new production facilities, known as trains, will be over the next five years.
In the coming months, the company is anticipated to announce its partners, according to industry sources.
The conditions for the new products are not available.
Feer indicated they are likely to be less appealing than those for the original LNG facilities. But they are still among the most competitive in the world.
He also said, “The returns on the expansion will be less merely because the risk from the earlier trains is largely gone.”
Lastly, “There’s no reason for the Qataris to give a better deal.”
Part of the strategy under Chief Executive Saad Al Kaabi to expand its global operations are the QP’s overseas investments.
Kaabi is also known to be Qatar’s energy minister.
Moreover, Kaabi has not hidden all of his intentions.
In 2018, Kaabi stated in a news report interview, “We are looking for a lot of things including asset swaps, things that will help me in my international expansion.”
In addition, “If I don’t get good deals, nobody will come.”
The overseas investments and partnership with foreign companies have also assisted Qatar to resist a ban which was imposed by several neighboring countries.
Saudi Arabia led the ban in 2017 over accusations that Doha supports terrorism.
Qatar disagrees with the charges.