Back to top

Analyst Blog

Occidental Petroleum Corporation’s (OXY - Analyst Report) subsidiary Occidental Petroleum of Qatar Ltd. (“Oxy Qatar”) has entered into an agreement with Qatar Petroleum to jointly work on the Phase 5 Field Development Plan (FDP) of the Idd El Shargi North Dome Field (ISND) offshore Qatar. Both companies will jointly invest approximately $3 billion for this project.

The agreement is a part of the Development and Production Sharing Agreement signed in Jul 1994 between the government of the State of Qatar and Oxy Qatar to construct the ISND. The joint exercise has already started and the companies will continue to maintain oil production levels at approximately 100,000 barrels/day through the next six years.

Oxy Qatar and Qatar Petroleum chalked out the schedules of the ISND Phase 5 FDP from the feedback obtained from the upgraded reservoir simulation models.

Per the agreement, Oxy Qatar and Qatar Petroleum will drill over 200 additional productions wells, utilize water injection method and install water source wells. The companies will offer allied facilities to support the additional wells. Further, both the companies will conduct pilot studies to support Produced Water Re-Injection and Enhanced Oil Recovery projects.

The main objective of the ISND Phase 5 FDP is to execute and/or upgrade the water-flooding practices in all of the oil producing reservoirs. The project will also enable Oxy Qatar and Qatar Petroleum to expand and fully utilize the existing contract reservoirs, while working jointly to optimize the long-term production and recoverable reserves.

Currently, global oil and gas companies are increasing their presence in Africa, Asia and Europe and sometimes teaming up with local players to discover unexplored reserves. Energy major Chevron Corporation (CVX - Analyst Report) announced the start-up of production from its first Angola liquefied natural gas project. TOTAL S.A. (TOT - Analyst Report), another energy company, received the necessary approval from Nigerian National Petroleum Corporation for the development of offshore Egina field.

Royal Dutch Shell plc’s (RDS.A - Analyst Report) Nigerian joint venture – SPDC JV – decided to invest a total of $3.9 billion to develop two projects – the Trans Niger Pipeline loop-line and the Gbaran-Ubie Phase Two, both based in the eastern Niger Delta of Nigeria.

Occidental Petroleum has a strong presence in Qatar. The company operates in the Idd El Shargi South Dome Field and the Al Rayyan Field in Block 12. The company also has operations in Iraq, Libya, Oman, Qatar, United Arab Emirates and Yemen. We believe the steady progress at the high profile Al Hosn gas project in Abu Dhabi will likely boost the company’s future performance.

However, volatile oil prices and uncertainty associated with drilling results may challenge Occidental Petroleum’s financial performance in the future. The company currently has a Zacks Rank #3 (Hold).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
UTD THERAPE… UTHR 117.83 +28.51%
TRIQUINT SE… TQNT 20.67 +6.52%
RF MICRO DE… RFMD 12.47 +6.04%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%