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By Amena Bakr
DOHA Dec 23 Qatar wants to help Iran to develop
its share of the world's biggest gas field so both countries can
reap the maximum long-term rewards, sources at state-run Qatar
Petroleum (QP) say.
The Gulf state has offered its support in response to a
request from Iran amid signs that western sanctions might ease
after it signed a deal in November that offers more transparency
over its nuclear programme.
The giant gas field beneath the waters of the Gulf, which
Iran calls South Pars and Doha calls the North Field, accounts
for nearly all of Qatar's gas production and around 60 percent
of its export revenues.
Multi-billion dollar plants built with big Western energy
companies have helped Qatar become the world's largest liquefied
natural gas (LNG) exporter, while western sanctions have
prevented Iran from mirroring that success.
Worried that overproduction might reduce long term recovery
from its biggest asset, in 2005 Doha imposed a moratorium on new
developments which is expected to last until at least 2015.
Iran, which suffers severe domestic gas shortages, has made
a rapid increase in production from South Pars a top priority
and some in Qatar are concerned too much Iranian exploration
drilling might impair recovery rates for both sides.
Some in Doha believe Iran's relations with the West have
thawed enough for other experts in Qatar's multi-national energy
industry to share some knowledge already gathered from probing
deep below the seabed.
"After Iran signed the nuclear deal this has opened the door
for us to help them with making more use of South Pars, and the
plan is to give them advice on technology and exploring the
geology of the field," a QP source said.
According to the International Energy Agency, the field
holds around 51 trillion cubic meters of gas and some 50 billion
barrels of condensate, a valuable light oil byproduct which
makes Qatari LNG one of the most cost-competitive gas supplies
in the world.
A Qatari government official working at one of QP's drilling
units said that many of the easily recoverable reserves lay in
the area on either side of the countries' maritime border.
"There has been a lot of drilling activity in that area and
we have many studies on the field that I'm sure can benefit
Iran," he said.
Despite the moratorium on new developments, exploration on
both sides of the border has caused the pressure to drop in many
wells, reducing flows to the surface, according to the U.S.
Energy Information Administration.
Iran's new energy minister said in August that he wants the
two countries to work together to maximize production and there
are signs that they are looking to cooperate.
"We have established channels of communications and
established teams...between the two countries," Qatar's Energy
minister told Reuters at an OPEC meeting in Vienna in early
"We always explore the means of cooperation and coordination
together," he said, declining to give details of specific plans.
LNG production in Qatar is divided between two companies,
Qatargas and Rasgas. QP owns a majority stake in both, with
international oil companies holding smaller stakes in individual
QP holds 70 percent of Rasgas, with U.S. oil and gas giant
ExxonMobil holding 30 percent. Qatargas is owned by a
consortium including Total, ExxonMobil,
ConocoPhillips and Royal Dutch Shell.
With QP mainly relying on foreign partners in the technology
used to develop the North field, some analysts say there is
limited practical help that QP could offer as long as sanctions
remain in place.
"This is just a public relations move for Qatar," Kamel Al
Harami, an independent Kuwaiti energy analyst, said.
"It doesn't own any of the technology in the North Field and
if it starts sharing foreign company technology that's a
violation of sanctions."
Less than half of QP's employees are Qatari. None of its
U.S. employees would be able to take part in any team advising
Iran, a legal expert on Iran sanctions said.
"As long as QP doesn't take the exact same technologies
listed in contracts and hand them over to Iran they are free to
give them general advice about the geology of the area, that
wouldn't be a violation of sanctions," an international gas
company executive in Qatar said.
(Additional reporting and editing by Daniel Fineren; editing by