Qatar Oil Minister: Barzan Project with Exxon Delayed, Not Shelved

DOHA (Wall Street Journal via Dow Jones Newswires), April 6, 2009

Qatar has delayed, not shelved, the large-scale Barzan natural gas field project to be developed with Exxon Mobil Corp. (XOM) to benefit from a drop in construction cost, the country's oil minister said Monday.

"We delayed on purpose," Abdullah bin Hamad Al Attiyah said. "We decided to delay due to costs because the price trend (of construction) has changed since 2008."

The minister said the "strategic decision" would ensure that Qatar and its partners Exxon Mobil and Qatar's RasGas Co. Ltd. get the most value for their money and build out at the lowest costs possible. The minister didn't specify a timeframe.

Qatar and its partners "decided not to build in a high-cost environment" and instead decided to wait until they saw costs stabilize so that they could "benefit and build as costs come down," Al Attiyah said.

QP and ExxonMobil launched the Barzan project in February 2007 after the U.S. firm pulled out of a planned gas-to-liquids project due to escalating cost.

Al Attiyah said in January the Barzan gas field development, in which Exxon Mobil has a 10% stake, would produce first gas in 2013.

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