Occidental Petroleum No Longer Extending Qatar Field Contract

Occidental Petroleum No Longer Extending Qatar Field Contract

Occidental Petroleum Corp announced they are no longer pursuing an extension of the Qatari Idd El-Sharghi North Dome (ISND) offshore oil field, the company announced in a press release.

Occidental’s current contract expires in October 2019.

The company stated that the 2018 free cash flow for ISND is estimated to be less than $300 million, with production of 51,000 barrels per day (b/d).

Major infrastructure investments required under an extension of the contract would mean the company’s estimated free cash flow for the first five years would be roughly $70 million annually.

Occidental plans to replace the production and cash flow from ISND in 2020.

“Consistent with our strategy, our intent is to redeploy our capital and human resources to projects where we can deliver the highest returns for our shareholders,” President and Chief Executive Officer Vicki Hollub said.

Occidental’s shares fell 5.2% to $72.98 following the announcement, Reuters reported.

Qatar Petroleum announced that is will replace Occidental in managing and operating the field.

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