By Sabina Zawadzki
LONDON, May 4 (Reuters) - Denmark's A.P. Moller-Maersk saidfor the first time on Wednesday there was a risk it could loseits largest oil producer, a 300,000 barrel per day Qatari field,and may not replace the production by buying other assets.
Chief Executive Nils Smedegaard Andersen's comments givesome insight into Maersk's view of how the oil industry willevolve, after oil prices more than halved in the past two years.
The recently-streamlined conglomerate still considers Maersk Oil as core to its business and for years the expectationwas that the Qatar field would be part of this as Maersk wouldrenew a 25-year production agreement when its licence ran out in2017.
But the Gulf state surprised the company last year byputting out a tender for the Al Shaheen field, which Maersk Oilhas been operating since 1992.
"On Qatar, yes, we are in a tender process. That means, thatthere is a risk that we will lose Qatar but we don't feel thatthat should induce us to go out and do something dramatic on theM&A activity to replace volumes," Andersen told investors.
Last year, Andersen was more upbeat about the tenderprocess, saying Maersk had a good chance of winning it. He hasalso said Maersk would be interested in buying other oil assetsbecause they have become so cheap due to falling crude prices.
His latest comments came after the company said its MaerskLine shipping unit had returned to profit in the first quarter,surprising most analysts who had expected a loss.
Andersen has overseen a streamlining of the sprawlingconglomerate and has said Maersk would focus on shipping, portoperations and oil and oil services.
Maersk Oil's entitlement production from the Al Shaheenfield was 164,000 bpd in the first quarter of this year, almosthalf of the company's total entitlement production of 350,000bpd and by far the largest contributor to its portfolio.
Maersk last year scrapped a target for the oil unit toincrease entitlement production to 400,000 bpd in the comingyears and slashed exploration spending due to low oil prices.
In some years, Maersk Oil has contributed a third to half ofgroup profits, though that dropped when oil prices fell.
A Qatari oil source told Reuters the Gulf state had invitedinternational majors to the tender because it wanted to raiseproduction at the field to 500,000 bpd. The source said ExxonMobil and Royal Dutch Shell were alreadylong-standing partners. Total has also been invited totender.
Maersk Oil had originally planned for Al Shaheen'sproduction to reach 525,000 bpd by 2010, after a 2005 fielddevelopment plan was approved, but output remained at about300,000 bpd. The oil reservoirs are notoriously thin and spreadout across a vast area, making production difficult. (Additional reporting by Nikolaj Skydsgaard in Copenhagen andRon Bousso in London; Editing by Alexander Smith)
