ConocoPhillips bid team delivers lasting value with Qatar LNG deals

KEY POINTS:

• Qatar North Field Expansion Bid Team wins 2023 SPIRIT of Performance Award for overseeing two LNG agreements with QatarEnergy
• ConocoPhillips builds on its long history of partnering with QatarEnergy
• Long-term relationships, high-performing secondees form foundation for deals

BY GUS MORGAN

In 2022, QatarEnergy selected ConocoPhillips to participate in the North Field East (NFE) and the North Field South (NFS) projects, which are part of the multi-phase North Field Expansion Project.

The ConocoPhillips employees who formulated the NFE and NFS bids and handled the negotiations for those two deals — a group known as the Qatar North Field Expansion Bid Team — were recently honored with a 2023 SPIRIT of Performance Award for their successful work, a prestigious recognition bestowed upon ConocoPhillips employees who display the company’s highest standards of performance.

The bid team consisted of employees from the Qatar business unit, Projects, Commercial, Treasury, Legal, Acquisitions & Dispositions, Government Affairs, Investment Appraisal and Global LNG. At global weekly meetings, led from Doha, Qatar, team members provided updates on Qatar developments and on global work streams supporting the overall effort.

“The culture of our bid team was supportive, positive and effective,” said ConocoPhillips Alaska Vice President Strategy, Commercial and Transportation Barry Romberg, who served as team lead for the group while serving as vice president of Commercial and Business Development in Qatar. “The global teamwork involved was certainly a success factor.”

The first of the two deals, the NFE effort required the work of more than 40 team members from 2017-2022. For NFE, QatarEnergy invited ConocoPhillips to be part of a highly competitive request for proposal process. The team submitted an initial bid on NFE in 2021, followed by subsequent bids in early 2022. In June 2022, QatarEnergy selected ConocoPhillips to participate in NFE with 25% equity in a 4 million tonnes per annum (MTPA) joint venture.  

“While the final push is getting formal credit for the win, there were dozens of others involved in earlier phases that laid the groundwork for the final deal,” Romberg said. “It has been said more than once by senior leaders close to the project that the global collaboration witnessed on NFE was some of the best observed over their entire career.”

Similar to NFE, subsequent to the bid submission, the team handled several stages of NFS negotiations that involved down-to-the-wire decisions and approvals. On Oct. 30, 2022, ConocoPhillips was announced as the third and final participant in the NFS project with 25% equity in another 4 MTPA joint venture. 

“The Qatar North Field Expansion Bid Team was adaptable, accountable and resilient in dealing with the many facets of the negotiations, including the final key terms of two sale and purchase agreements required for securing NFS participation,” said ConocoPhillips Qatar President Todd Creeger, who retired in late February after 37 years with ConocoPhillips. “Of the SPIRIT Values, teamwork was the most visible and most critical success factor. The team demonstrated how large, diverse teams can seamlessly work together across time zones to secure investment opportunities that fit into the company’s strategic goals and will deliver long-term growth.”

Such teamwork made all the difference, said Qatar Managing Counsel Roger Belman.

“It would have been impossible to chase participation in the North Field expansion projects,” Belman said, “in competition with the world’s largest international oil companies, with limited information, and no control over schedule, and achieve a successful outcome that fit our financial framework, without teamwork, structural collaboration and a strong pulse of knowledge sharing.”

The Doha-led team, he said, put a heavy emphasis on sharing information with team members around the globe, and not just information limited to their functional or geographic area.

“It also encouraged team members to contribute thoughts and perspectives beyond their traditional roles to leverage everyone’s experience and expertise,” Belman said. “A sense of personal ownership and a single agenda was bred by these simple practices and that allowed the team to move with quality and speed throughout a lengthy, competitive process.”

Global LNG Market and London Office Manager Birger Balteskard, who has been working on LNG projects in Qatar since 2002, reflected on the catalysts behind the 2022 deals. 

"The addition of NFE and NFS showcases the strong trusted relationship formed over decades between Qatar and ConocoPhillips," he said. "The fact that ConocoPhillips managed to deliver a very competitive offtake program for the expansion projects, providing the first long-term LNG deliveries to Germany, is a result of collaborative teamwork across functions, time zones and effective decision making across the organization."

Strength of reputation, long-term relationships

While the business terms of the deals played a major role, the agreements also hinged on something more: ConocoPhillips’ people, valued in the oil and gas industry not only for their technical and business expertise, but their trustworthy reputation.

“The Qatar business environment hinges on trust, and that trust is formed over years and in some cases decades, rooted in long-term personal relationships,” Romberg said. “We had a lot to offer Qatar on these projects, but to be heard, you have to have the personal relationships.”

Over the years, numerous ConocoPhillips employees played a role in fostering and nurturing those Qatar relationships, including Romberg; Creeger; Vice President APLNG Non-Operated JV Manager Bryan Frisbie; President Australia Dan Clark; and Executive Vice President & Chief Financial Officer Bill Bullock. Of critical importance to the success of both deals was the strong working relationship between ConocoPhillips Chairman & CEO Ryan Lance and QatarEnergy President & CEO Saad Sherida al-Kaabi, His Excellency the Minister of State for Energy Affairs.

 "We believe our people really played into the selection process,” Romberg said. “They trust our people.”

Much of that reputation is owed to ConocoPhillips’ high-performing secondees.

“Our secondees placed in Qatargas and QatarEnergy are the face of ConocoPhillips in Qatar,” Romberg said. “The nearly 30 staff currently placed inside those companies are our brand ambassadors and work every day to demonstrate the professionalism, trust and integrity that ConocoPhillips represents.”

A successful NFE bid, followed by NFS

The NFE bid process entered its final phase in 2022 after QatarEnergy issued its last request for proposal.

ConocoPhillips Chairman & CEO Ryan Lance and QatarEnergy President & CEO Saad Sherida al-Kaabi, His Excellency the Minister of State for Energy Affairs, during the official signing ceremonies for the two LNG deals, the North Field East Project in June 2022 (top), followed by the North Field South Project in October 2022. 

Springing into action, the Qatar Bid Team got to work, conducting negotiations with QatarEnergy and collaborating with ConocoPhillips’ executive leadership team, eventually receiving Board of Directors approval to submit a final bid, which QatarEnergy accepted in June 2022.

“It was an extremely competitive bid process,” Romberg said. “But our team was up for the challenge.”

While the first deal took years to execute, the second deal involving NFS played out on a much shorter timescale.

For the NFS bid, the team leveraged the groundwork established by the NFE team, Romberg said.

“The NFS bid came with an entirely different set of challenges,” he said, “but everyone pulled together, including key members of the Executive Leadership Team, and we pulled it across the line.”   

Why is ConocoPhillips ramping up its LNG presence?

With numerous power-generation applications, LNG is playing an increasingly important role in energy security and the global energy transition, and the NFE and NFS LNG projects rank as some of the lowest in greenhouse gas emissions worldwide. ConocoPhillips and QatarEnergy’s 2022 sale and purchase agreements will enable the production and delivery of this vital energy resource to Germany.

The Qatar deal is a win-win for ConocoPhillips and QatarEnergy. For ConocoPhillips, this type of investment is favorable because, after the development phase, there will be minimal capital required, and no production decline, for the entire contract term. For QatarEnergy, the state-owned company gains a trusted and experienced co-venturer to share the capital requirements of the projects and supply valued personnel to help execute the projects.

A history of LNG excellence

ConocoPhillips has long been a historical marketing leader in LNG, dating back to its Kenai LNG plant in Alaska that opened in 1969. For decades, that plant produced LNG for export. It was once the world's largest facility of its kind, and the first serving the Asian market. ConocoPhillips is also known for its LNG technology and Optimized Cascade process licensing program.

In 2003, ConocoPhillips partnered with QatarEnergy to launch the Qatargas 3 LNG project in Ras Laffan Industrial City, Qatar.

“Qatargas 3 has been a fantastically successful project,” Romberg said.

The NFE and NFS projects represent the most recent of ConocoPhillips’ LNG portfolio additions.

In Feb. 2022, ConocoPhillips picked up a 10 percent interest in APLNG.

And in July 2022, ConocoPhillips agreed to take a 30% stake in the first phase of Sempra Energy’s proposed Port Arthur LNG terminal in Texas.