The Qatar Oil Discoveries
Qatar is relatively a small peninsula, 160 km long and 55-90 km wide, that extends from Saudi Arabia into the Persian Gulf. It is an Arab emirate ruled by the Al-Thani family since the 1870s. From 1872, to the beginning of World War I in 1914, Qatar was under the Ottoman Empire. Qatar gained its independence in 1971, after being a British protectorate since 1916. The early twentieth-century history of oil exploration in Qatar is associated with British players in the region.
As early as 1922, Major Frank Holmes (also called “Abu Naft,” or Father of Oil in the Middle East) had his eye on Qatar’s oil resources. Holmes was a New Zealand-born British miner, army officer, and oil businessman who represented the London-based Eastern and General Syndicate’s ventures in the Middle East, and helped obtain oil concessions in Saudi Arabia, Kuwait and Bahrain in the 1920s (see “The Emergence of the Arabian Oil Industry,” GEO ExPro, 06/2008). However, Holmes, who also managed to met with Qatar’s ruler Shaikh Abdullah bin Jassim al-Thani in Doha in 1923, did not proceed with his ideas because the British Colonial Office had prohibited oil ventures in Qatar.
By 1925, however, such restrictions appear to have eased, for in early 1926, George Martin Lees, a geologist with the Anglo-Persian Oil Company (APOC, later British Petroleum), visited Doha and made a one-day trip to a few outcrops of Qatar, which he rightly identified as Eocene limestone exposed on the crest of a gently-dipping anticline. Before leaving, Lees also obtained permission from the Shaikh for exploring the emirate for the following two years.
What renewed the British interest in Qatar’s oil was the 1932 discovery of oil in Bahrain by the Standard Oil Company of California. Alarmed by the American company’s success in the region, APOC sent C. C. Mylles to Doha to negotiate an oil concession with the Shaikh. In August of that year, APOC was granted a two-year exploration license in Qatar. This venture, however, posed a problem for APOC, as the company had signed the 1927 “Red Line” with a consortium of oil companies called the Iraq Petroleum Company (IPC) to the effect that no member of the consortium would be engaged, on its own, in any exploration activity in the former Ottoman empire of the Middle East, and Qatar was part of the Red Line Agreement. APOC thus informed IPC of its option in Qatar, and IPC permitted APOC to act as its nominee in Qatar.
Late in 1932, APOC dispatched two geologists, E.W. Shaw and P.T. Cox, to Qatar. After a survey during January-March 1933, the team found out that the Dukhan anticline in southeastern Qatar shared similarities with the discovery field in Bahrain: Its surface rocks were Eocene limestone and hence good potential for a Cretaceous reservoir rock (like that of Bahrain). The Dukhan anticline was nothing but the highest hills in Qatar, which the natives called Jabal Dukhan (“Hill of Smoke”) for its oftentimes hazy weather.
In 1933-34, APOC dispatched W.E. Browne and D.C. Ion to precisely map the Dukhan anticline. After this mapping, APOC entered a negotiation with Qatar, and on 17 May 1935, it was granted a 75-year oil concession covering all of Qatar’s land to explore and produce oil. In return, the Qatar government was to receive a royalty of 2 Indian rupees per ton of oil produced, a payment of Rs. 400,000 on signature, and an annual sums of Rs. 150,000 (after five years, Rs. 300,000) in addition to the royalty. Two years later, APOC on behalf of IPC created a new company called Petroleum Department of Qatar, which took over the concession and its operations. This new company included BP (23.75%), Royal Dutch Shell (23.75%), Cie Francaise des Petroles (23.75%), Standard Oil of New Jersey (11.87%), Mobil (11.87%), and Paratex (Glubenkian Foundation) (5.0%).
During the winter of 1937-38, a new group of geologists, Norval E. Baker, T.F. Williamson, and R. Pomeyrol, visited Dukhan to locate a drilling site. They examined the Dukhan anticline, which was 80 km long with 90 meters of structural closure in the Middle Eocene limestone, and recommended a location for the first well.
Qatar at a Glance
- Land area: 11,437 sq. km (4,416 sq. mi)
- Population: 860,000 (largely immigrants from other parts of the Middle East)
- Proven oil reserves: 25.41 billion barrels Oil production: 843,000 bopd
- Producing oil wells: 421
- Crude oil exports: 703,000 bopd
- Refinery capacity (Umm Said built in 1953 with an initial capacity of 600 bopd): 80,000 bopd
- Proven natural gas reserves: 25.466 trillion cubic meters (891 Tcf, world’s third largest after Russia and Iran)
- Gas production: 76.98 billion cubic meter (Bcm)
- Natural gas exports: 56.78 Bcm
- OPEC member since 1961
- Source: OPEC Annual Statistical Bulletin 2008
The Story of Shaikh Mansour
All historical oil discoveries in the Middle East included local guides, some of whom contributed no less than their bosses to the success of expeditions although these men have often gone nameless or little known. In the case of the Dukhan field, however, we are fortunate to have a report about a man named Shaikh Mansour, who helped the Shaw-Cox survey in 1933 and the Williamson-Baker survey in 1937-38. Williamson later remarked that Shaikh Mansour “appeared to have a mental picture of the whole of Qatar and had a quite uncanny capacity for knowing exactly where he was under all conditions – in clear weather, in fog, or even in darkness.” He ensured that the field work proceeded smoothly among the local inhabitants; he was also quick to learn geology, especially for locating the outcrops of Eocene-age Alveolina (a large foraminifer fossil) limestones in Qatar. During World War II, Mansour went blind from trachoma. Despite this, in 1946 he joined N.E. Baker and F. E. Wellings, geologists working for Petroleum Development of Qatar, to examine outcrops outside the Dukhan field. For this new field work, Mansour took his nephew as his “seeing eye,” and still proved to be an excellent guide. He lived in a village near Dukhan until his death in 1972.
The discovery well
Drilling of Dukhan No. 1 began in October 1938. In the last weeks of 1939, the well hit oil shows, not in the Cretaceous limestone (as had been expected with comparison to the Bahrain field) but in the Upper Jurassic limestone, similar to Saudi Arabia’s Dammam field discovered in 1936. In January 1940, Dukhan No. 1 was completed at a depth of 1733 m, and was then producing about 4,480 barrels of oil per day (bopd).
The producing reservoir rock, the Upper Jurassic Zekrit Formation, was similar to the Arab Formation of Saudi Arabia, even having the same number of limestone payzones which had been named A, B, C, and D of Arab Formation in the Dammam field. However, N. T. Langham, the well site geologist, unaware of these payzones discovered two years earlier, called the Zekrit limestones as No. 1, 2, 3 and 4. (Zekrit Formation is named after the port of Zekrit, northeast of Dukhan, where a jetty had been built by the drilling team for unloading materials.)
In March 1941, Dukhan No. 2 was drilled about 16 km south of the first well. It discovered oil in the No. 3 limestone and gas in the No. 4 limestone. In May 1942, Dukhan No. 3 was drilled about 5 km east of the first well. However, World War II (1939-45) put an end to field operations in Dukhan. Indeed, Dukhan wells and installations were stripped or destroyed in 1942; therefore, after the war ended, the field needed reconstruction.
Renewed operations began in late 1947. During the following three years, three drilling rigs were continuously employed to drill 25 wells. Meanwhile, a 120-km pipeline was built from the Dukhan field to the port of Umm Said in eastern Qatar where terminal facilities also were put in place. On 31 December 1949, the first shipment of the Dukhan crude was made from Umm Said (Mesaieed) where the tanker S.S. President Manny carried 80,000 tons of oil to Europe.
By 1950, Qatar was producing 33,800 bopd. The production increased threefold by 1954. In 1950, Qatar’s revenue from oil was $1 million; it amounted to $23 million in 1954, mainly because in September 1952, Qatar had signed a new agreement with the Petroleum Department of Qatar calling for 50-50 profit-sharing.
The Dukhan field is comprised by three oil reservoir sectors, Khatiyah, Fahahil, and Jaleha/Diyab, respectively, from north to south. Early production was from the Khatiyah sector. Production from Fahahil began in 1954 and from Jaleha in 1955. In 1955, Dukhan No. 1 began producing water so much so that the provincial government designed a man-made oasis. But many other wells continued producing oil from. By 1957, 58 wells had been drilled in the Dukhan, of which 48 wells were producers. In 1959, production averaged about 169,000 bopd.
During 1959-60, deeper wells in the Dukhan field discovered non-associated gas from the Permian Khuff formation (GEO ExPro 04/2009) at a depth of 3,000 m, and this new play added to the hydrocarbon wealth of the Dukhan oil and gas field. The top of the Khuff formation lies at depths of 2835-3262 m, and its thickness varies from 448-564 m. Gas production from the Khuff commenced in 1978.
In 1952, Petroleum Department of Qatar together with Petroleum Department of Oman and Dharfur and Petroleum Department of Trucial Coast States (small shaikhdoms between Qatar and the mouth of the Persian Gulf) merged to form the Petroleum Concessions Ltd under the general-manager of G. Heseldine.
In 1953, with further organizational changes, Petroleum Department of Qatar was named Qatar Petroleum Company.
In 1972, the government of Qatar established the Qatar National Oil Company to manage its oil operations. In 1973, the government took 25% share each of Qatar Petroleum Company and Shell Company of Qatar. In 1974, the government established the General Petroleum Corporation (later called Qatar Petroleum), and signed new agreements with the two oil companies giving 60% share to the state-run Qatar Petroleum. In 1977, Qatar fully nationalized onshore and offshore operations and gave service contracts to the former concessionaries.
Offshore Qatar 1960s: Enter Shell
In August 1949, the new ruler of Qatar, Shaikh Ali ibn Abdullah al-Thani (the elder son of the former Emir), gave a concession to the International Marine Oil Company (a subsidiary of the Superior Oil Company and Investment Corporation) to explore for oil offshore Qatar (in waters beyond the 3-miles line); but the company could not locate any suitable structure for drilling, and thus relinquished the concession in 1952.
Qatar, in turn, granted a new offshore concession to Shell Overseas Exploration Company; the concession was transferred in 1954 to a new subsidiary called Shell Company of Qatar. The concession, covering 25,900 sq km (the equivalent of 4 North Sea quadrants), was for 75 years and included an initial payment of £260,000 to the Shaikh, and a fifty-fifty profit sharing after production; field operations were bound to start within nine months and drilling within two years. Shell started seismic survey in the Qatar waters in the spring of 1953 and drilled two exploratory wells in 1955 and 1956; both wells were dry. It was only in May 1960 that Shell discovered the Idd al-Sharqi oil and gas filed, some 85 km east of Doha. This field consists of two elliptical domes; the larger North Dome (which was discovered and produced first) and the smaller South Dome.
In 1963, Shell discovered another major offshore field, the Maydan Mahzam, with payzones at Arab-D, Arab-C, and Uwainat. Production from this field started in 1965. In 1969, the Idd al-Sharqi was producing 35,000 b/d and the Maydan Mahzam 100,000 b/d. By then, Qatar’s total oil production had increased to 17 million tons (293,000 bopd), earning its government $115 million in 1969.
Production from the Idd al-Sharqi in 2006, according to a report by Qatar’s Ministry of Foreign Affairs, was close to 144,000 bopd from the North Dome and 10,000 bopd from the South Dome. Production from the Maydan Mahzam in 2003 averaged 38,800 bopd.
Crude produced from these offshore fields were (and are) stored at facilities on the island of Halul (located about 80 km northeast of Doha), which also has pumping stations and loading terminals for tankers. The first shipment of oil produced from the Idd al-Sharqi North Dome field was exported from this island on 1 February 1964.
The Dukhan Field Today
Dukhan, Qatar’s only onshore oil and gas field, is located about 84 km west of Doha. Its oil production capacity, according to Qatar Petroleum, is up to 335,000 bopd but the actual production is subjected to reservoir management. The total number of wells in the Dukhan field is 605, including 300 oil-producing wells, 182 water injection wells, 58 gas-producing and injector wells; the remaining are shut-in, observational or abandoned wells.
Oil and gas from the Dukhan field are separated in four degassing stations: Khatiyah North, Khatiyah Main, Fahahil Main and Jaleha. (The Khatiyah, Fahahil and Jaleha stations were built in 1949, 1954, and 1955, respectively.) The crude is then pumped to the Umm Bab Booster Station where its pressure is boosted for transportation by pipeline to the Umm Said (Mesaieed) port, about 100 km east of Dukhan.
In 1989, water injection in the Dukhan field was started to maintain reservoir pressure. In 1998, a gas recycling plant was started to process 800 million cubic feet per day of Arab-D gas cap to recover 38,000 bopd of condensate and 750 tons per day of NGL. In 2008, Qatar Petroleum awarded a $140 million deal to French firm CGS Veritas for a 3D-seismic survey of the Dukhan field. This project is expected to be completed by the end of 2011. A new reservoir study of the Dukhan field is also underway and will be completed in 2012.