Qatar joins GE in oil services deals

DOHA // Qatar Petroleum (QP) and General Electric (GE) have sealed joint-venture agreements to develop pipeline and oilfield servicing facilities in Qatar. The initiatives between Al Shaheen Energy Services and GE Oil and Gas, respectively the oilfield services units of QP and GE, involve a combined investment of US$305 million (Dh1.12bn).

More significantly, the agreements could help establish QP in the international market for energy services while helping Qatar achieve its target of nearly doubling its oil and gas output to about 5 million barrels of oil equivalent per day (boepd), Abdullah al Attiyah, the Qatari deputy prime minister, said yesterday. Under the joint-venture agreements, preliminary versions of which were signed last December, Al Shaheen becomes a 50 per cent strategic partner in PPI Pipelines Solutions, the existing international pipelines inspection business of GE Oil and Gas.

The partners also created Al Shaheen/GE Services to service and repair large pieces of equipment, such as gas turbines and compressors, used in Qatar's immense concentration of large-scale energy projects. Those include offshore production from the world's biggest gasfield, a number of huge natural gas liquefaction plants that are the world's largest, as well as refineries and gas-to-liquids projects.

"By establishing the local joint venture, our turnover will be reduced and our production will increase," said Mr al Attiyah, who is also Qatar's energy minister and the chairman and managing director of QP, the state petroleum company. "Shipping turbines to Cyprus for servicing used to take weeks or months. This allows us to become more efficient." Qatar produces more than 900,000 barrels per day (bpd) of oil, which it aimed to increase to 1 million bpd, and 2.7 million boepd of combined oil and gas, Mr al Attiyah said.

The pipeline inspection venture would develop a centre of excellence in Qatar geared towards exporting technology to the oil and gas industry worldwide. It would also provide "after-market services" to international customers that buy the equipment. "To create this kind of joint venture will create Al Shaheen as an international company," Mr al Attiyah said. Claudio Santiago, the president and chief executive of GE Oil and Gas, said GE's existing pipeline inspection technology had been adapted from technology developed by the healthcare industry, in which GE also has a significant presence.

It uses remotely controlled shuttles laden with sophisticated sensors that travel through pipelines, examining them for signs of corrosion and cracks that could lead to ruptures and leaks of oil or gas. Mr al Attiyah said pipeline inspection was crucial to preventing problems in petroleum operations worldwide, because every aspect of the industry required pipes to transport fluids and gas. "There is no oil and gas business without pipelines," he said. "I am confident this company will give more attention to how to avoid problems."

In light of the catastrophic BP oil spill in the Gulf of Mexico, the oil and gas industry urgently needed to direct its attention to this issue, Mr al Attiyah said. Mr Santiago said GE was committed to expansion in Qatar. "It is a big day for GE," he said. "Our aspiration is that we will grow the business in the Middle East and all over the world. "We are committed to continue to grow our presence here by exporting our technology to the rest of the world."

tcarlisle@thenational.ae