QatarEnergy Picks Up Stakes from Exxon in Canadian Offshore Blocks

©Qatar Energy
©Qatar Energy

Qatar's state-owned energy company on Wednesday signed a deal to acquire from ExxonMobil stakes in two Canadian offshore explorations block, the latest in the Gulf state's efforts to expand its global oil and gas portfolio.

QatarEnergy, the world's largest producer of liquefied natural gas (LNG), has in recent years entered some of the most promising oil and gas basins through deals with top Western companies eager to secure stakes in Qatar's LNG industry.

As part of its quest to diversify internationally, QatarEnergy has in recent years picked up exploration blocks in basins including Guyana, Namibia, South Africa, and Cyprus from companies including TotalEnergies, Shell, and Exxon. 

More recently, it joined TotalEnergies and Italy's Eni in a three-way consortium to explore oil and gas in two maritime blocks off the coast of Lebanon. It is also in discussions to enter a large project in Iraq with TotalEnergies, Reuters reported.

The Qatari company first entered offshore exploration in Canada in 2021 with a 40% stake in ExxonMobil's licence for EL 1165A off the coast of Newfoundland and Labrador.

The latest farm-in agreement announced on Wednesday gives QatarEnergy a 28% interest in licence EL 1167, with ExxonMobil Canada holding 50% and Cenovus Energy 22%, as well as 40% in licence EL 1162, with ExxonMobil Canada holding 60%.

"We are pleased to sign this agreement with our strategic partner, ExxonMobil, to further grow our offshore Atlantic Canada portfolio as part of our international growth drive," QatarEnergy CEO Saad Al-Kaabi said in a statement.

For the Western companies, awarding QatarEnergy stakes in lucrative prospects is part of a wider quest to tighten ties with the company in an effort to secure a share in the Gulf country's sprawling LNG operations.

NEW NATURAL GAS SOURCES

Demand for natural gas is expected to rise in the coming decades as countries shift away from the more polluting coal to generate electricity. 

Europe's efforts to find new sources of natural gas to replace supplies from Russia in the wake of its invasion of Ukraine in February 2022 further strengthened the outlook for LNG demand.

Qatar last year picked Exxon, TotalEnergies, Shell, Eni, and ConocoPhillips as partners in a $30 billion expansion of its LNG production, known as North Field East. It also awarded stakes in a second expansion phase, known as North Field South, later last year.

Qatar is the world's largest LNG supplier and aims to expand production to 126 million tonnes annually by 2027 from 77 million tonnes under the two-phase North Field expansion project.


 (Reuters - Writing by Ghaida Ghantous in Dubai; Editing by Emelia Sithole-Matarise)

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