ADES bags multi-year extension for jackup in Qatar

Stu Turley

5 months ago

ENB Pub Note: This announcement of the ADES multi-year extension for a jackup rig raises a bigger question about the Qatar oil reserves and how much they produce. With the great Middle East Trip President Trump is on right now, this is a big question. They just signed a 160-plane deal with Boeing, which is a gigantic contract. While I would not do business with the current management, it is excellent for the country. If I were on the Boeing board, I would replace top management.

Key Points

Major Offshore Assets: Qatar’s primary offshore oil assets include the Al-Shaheen, Idd El-Shargi, Maydan Mahzam, and Bul Hanine fields, with Al-Shaheen being the largest.
Oil Production: As of May 2025, Qatar produces approximately 1.32 million barrels per day (bpd) of crude oil and condensate, with plans to increase by 19% by 2030.

Detailed Analysis

Major Offshore Assets

Qatar’s offshore oil production is centered in the Persian Gulf, with several key fields operated primarily by QatarEnergy (formerly Qatar Petroleum) and its joint ventures. The major offshore assets are:

Al-Shaheen: Qatar’s largest oilfield, located 80 km offshore northeast of Doha. Operated by North Oil Company (QatarEnergy 70%, TotalEnergies 30%), it produces about half of Qatar’s oil output. Recent investments include a $6 billion third-phase development (Project Ru’ya) to add 100,000 bpd by 2027, involving over 200 wells and new platforms.
Idd El-Shargi: Comprising Idd El-Shargi North Dome and South Dome, this field is operated by Occidental Petroleum under a production-sharing agreement. It contributes significantly to offshore production through enhanced oil recovery techniques.
Maydan Mahzam: Operated by QatarEnergy, this field is undergoing upgrades to maintain and boost production. It is a key offshore asset with ongoing facility improvements.
Bul Hanine: Also managed by QatarEnergy, this field is part of the offshore production network, with upgrades planned to increase capacity. It complements larger fields like Al-Shaheen.
North Field: While primarily a gas field (the world’s largest non-associated gas reservoir), the North Field produces significant condensates (light hydrocarbons) alongside natural gas, contributing to Qatar’s liquid production. Expansions are expected to add to condensate output.

These fields are supported by an offshore pipeline network transporting crude to Halul Island for processing and export. The North Field, while gas-focused, is critical for condensate production, which is included in Qatar’s oil output figures.

Current Oil Production

As of May 2025, Qatar’s crude oil and condensate production is approximately 1.32 million barrels per day (bpd), based on data from May 2023 remaining unchanged at 1,322 thousand barrels per day (BBL/D/1K), as reported by the Organization of the Petroleum Exporting Countries (OPEC). This figure aligns with historical trends, with 2021 production at 1.746 million bpd and 2023 at 1.322 million bpd, reflecting stable output amid global market adjustments.

Breakdown: Production includes crude oil from onshore (e.g., Dukhan) and offshore fields, plus condensates from the North Field. Al-Shaheen alone contributes significantly, with current output around 300,000 bpd, expected to rise post-2027.
Future Outlook: Qatar’s production is projected to increase by 19% from 2025 to 2030, driven by Al-Shaheen’s expansion and North Field condensate growth. By 2027, Al-Shaheen’s additional 100,000 bpd will boost total output. Enhanced oil recovery projects at Dukhan and offshore fields will also contribute.

Context and Challenges

Market Dynamics: Qatar’s oil production is modest compared to its LNG exports, where it is a global leader. The focus on LNG (North Field expansion aims for 160 million tonnes per annum by 2030) overshadows oil but supports condensate production.
Geopolitical Factors: Qatar shares the North Field with Iran (South Pars), requiring coordinated development. Regional tensions and OPEC+ policies influence production decisions.
Economic Role: Oil and gas account for 60% of Qatar’s GDP, with crude exports (600,000 bpd) primarily to Asia (Japan, South Korea). Production stability supports fiscal health, though diversification into renewables is underway.
Controversies: Environmental concerns around fossil fuel expansion and the economic feasibility of offshore projects (e.g., high-cost condensate refining) are debated. Qatar’s low production costs help mitigate risks, but global decarbonization pressures pose long-term challenges.

Table: Summary of Key Data

Aspect	Details
Major Offshore Assets	Al-Shaheen, Idd El-Shargi, Maydan Mahzam, Bul Hanine, North Field (condensates)
Current Production (2025)	~1.32 million bpd (crude + condensate)
Key Contributor	Al-Shaheen (~300,000 bpd, ~50% of total)
Planned Increase	19% by 2030, +100,000 bpd from Al-Shaheen by 2027

Conclusion

Qatar’s major offshore oil assets—Al-Shaheen, Idd El-Shargi, Maydan Mahzam, Bul Hanine, and the condensate-producing North Field—are central to its energy sector, with Al-Shaheen as the largest contributor. Current oil production stands at ~1.32 million bpd, with a projected 19% increase by 2030 driven by field expansions. Qatar’s strategic investments and low-cost production position it well, though environmental and geopolitical challenges persist.

Middle East Offshore

Saudi oil and gas driller ADES has signed a multi-year contract extension for one of its jackup rigs.

ADES signed a deal for the 2009-built Sapphire Driller with what it described as a “major operator in Qatar”.

The extension is for a firm duration of four years, with three additional one-year options. If all options are exercised, the rig could be busy through 2032.

The total contract backlog covering both the firm and optional periods is estimated at around SAR 816m ($217.5m). According to the company, the extension was signed on a better daily rate than the previous deal.

ADES stated that the contract added significant revenue visibility and strengthened backlog sustainability, further supporting its long-term growth trajectory in the region.