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Maersk battling for Qatari oil extension
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March 28th, 2014
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Negotiations have lasted over a year
Maersk is currently negotiating with Qatar concerning the oil and natural gas excavation rights to the nation’s largest oil field, Al-Shaheen.
The Danish company has enjoyed two decades of successful oil drilling in Qatar and wants to extend its contract, which is due to expire in three years' time. A new contract would be the largest ever for Maersk and provide it with the opportunity to generate 20 billion kroner a year.
But negotiations are strenuous and have persisted for over a year, and international oil giants are eyeing the opportunity to take over the lucrative excavation of the Al-Shaheen field.
“The negotiations are proceeding at full pace. They have worked at it for a long time, but this is the Middle East, so things can take time down here,” a source close to the negotiations told Berlingske newspaper.
READ MORE: Maersk reportedly selling offshore support company
Massive for Maersk
Even a slightly worse deal would be valuable for the Danish company, which would stand to generate over 600 billion kroner should the contract be extended by another 30 years.
State-owned Qatar Petroleum wouldn’t comment on the negotiations and Maersk wouldn’t comment on the details either, but said that it would reveal information when the time was right.
“We enjoy a good working relationship with Qatar Petroleum and Qatar’s government and we look forward to continuing our co-operation for many more years,” Maersk wrote to Berlingske.
Operations in Qatar are essential to Maersk, and there have been some periods in its recent history when the profits garnered from the Arab nation have totalled close to half of its overall profit.
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