Committed to Excellence Qatar Petroleum (QP), formerly Qatar General Petroleum Corporation, is a state-owned corporation established, by Emiri Decree No 10, in 1974 responsible for all phases of the oil and gas industry in Qatar. The principal activities of Qatar Petroleum and its subsidiaries and joint ventures cover exploration, drilling and production operations, transport, storage, marketing and sale of crude oil, natural gas liquids, liquefied natural gas, refined products, petrochemicals and fertilizers, and providing helicopter services. Qatar Petroleum’s strategy of conducting hydrocarbon exploration and new projects is through Exploration and Production Sharing Agreements (EPSA) and Development and Production Sharing Agreements (DPSA) concluded with major international oil and gas companies. The operations and activities of Qatar Petroleum are conducted on various onshore locations, which include Doha, Dukhan, Mesaieed and Ras Laffan Industrial Cities, as well as offshore areas including Halul Island, Offshore Production Stations, Drilling Platforms and the North Gas Field. In addition to its operations, QP carries out its activities through the following subsidiaries, joint ventures and other investments. A – Subsidiaries QP Interest C- Other Investments % Percentage% QP Qatargas (3) Limited 100.0 Qatar Fuel Company (WOQOD) 40.0 Gulf Helicopters Company (Gulf Helicopters) 100.0 Qatar Shipping Company (Q-SHIP) 18.2 Al Koot Insurance and Reinsurance Company 100.0 Qatar Metal Coating Company W.L.L 35.0 Qatar Petroleum Gas Trading (QGII) Limited 100.0 Qatar Real Estate Investment Company 0.8 Qatar Petroleum LNG Services (QGII) Limited 100.0 Qatar Plastic Production Company (QPPC) 18.7 Qatar Terminal Company Limited 100.0 Qatar Electricity and Water Company (QEWC) 10.8 QGPC Finance (Cayman) Limited. 95.0 Ras Laffan Power Company Limited (RLPC) 10.0 Industries Qatar Q.S.C (IQ) 70.0 Qatar Gas Transportation Company Limited “NAKILAT” 10.2 Qatar Nitrogen Company.(QAN) 50.0 Arab Shipbuilding and Repair Yard Company (ASRY-Bahrain) 18.8 Arab Maritime Petroleum Transport Company (AMPTC- Kuwait) 14.8 B – Joint Ventures Arab Petroleum Investment Corp. (APICORP- Saudi Arabia) 10.0 Qatar Liquefied Gas Company Ltd.Q.S.C. (Qatargas) Downstream 65.0 Arab Petroleum Services Company (APSC-Libya) 10.0 Arab Petroleum Pipelines Company (SUMED – Egypt) 5.0 Qatargas Joint Venture- Upstream 65.0 Nakilat Agency Company Limited 5.0 Ras Laffan Liquefied Natural Gas Company Ltd.(RL) 63.0 Qatofin Company Limited RasGas Company Ltd. (RasGas) 70.0 (QAPCO also holds 63.64%) 1.0 Ras Laffan Liquefied Natural Gas Company Ltd (II) (RLII) 70.0 Ras Laffan Olefins Company Limited Qatar Chemical Company Ltd Q.S.C (Q-Chem) 51.0 (Also 53.31% held by QChem II and 45.69% held by Qatofin) 1.0 Qatar Vinyl Company Ltd. Q.S.C (QVC) 43.4 United Stainless Steel Company (Bahrain) 17.5 Qatex Limited (QATEX) 51.0 United Helicharters Private Limited (India) 36.0 Oryx GTL Ltd. (ORYX) 51.0 Gulf Drilling International Limited (Q.S.C) 60.0 D- Joint Ventures and Subsidiaries of QP Subsidiaries Qatar Liquified Gas Company Limited (II) (Q.S.C) 70.0 Qatar Petrochemical Company Ltd (QAPCO) 56.0 SEEF Limited 80.0 Qatar Fertilizers Company Ltd (QAFCO) 52.5 Ras Laffan Liquefied Natural Gas Company Limited (3) RL3 70.0 Qatar Fuel Additives Company Ltd (QAFAC) 35.0 Qatar Chemical Company II Limited (QChem II) 51.0 Qatar Steel Company Ltd. (SAQ) (QASCO) 70.0 Qatargas Operating Company Limited 70.0 South Hook Gas Company Limited 70.0 South Hook LNG Terminal Company Limited 70.0 Qatar Liquefied Gas Company Limited (3) 68.5 Adriatic LNG Terminal Limited 45.0 QP also has established 100% subsidiaries, Qatar Petroleum International Limited and Qatar Petroleum Marketing Company Limited. In the name of ALLAH Most GRACIOUS Most MERCIFUL Annual Report 2005 7 Table of Contents Qatar Petroleum Board of Directors 8 Chairman’s Message 10 Highlights 12 Key Consolidated Financial Information 13 Administration 14 Safety, Quality and Environment 17 Oil and Gas – Fields and Operation Areas 18 Onshore 18 Offshore 20 Existing Projects in QP Industrial Cities 27 Ras Laffan Industrial City 27 Mesaieed Industrial City 30 Gulf Helicopters 38 Present & Future Projects 39 Consolidated Financial Statements 42 Annual Report 2005 8 Qatar Petroleum Board of Directors HE Abdullah Bin Hamad Al Attiyah HE Youssef Hussain Kamal Second Deputy Premier Minister of Finance Minister of Energy and Industry Vice Chairman Chairman, QP Annual Report 2005 9 Qatar Petroleum Mr. Abdullah H Salatt Dr. Ibrahim Al-Ibrahim Mr. Faisal M. Al-Suwaidi Senior Advisor Economic Expert, HH The Emir's Office Vice Chairman & Minister of Energy and Industry Office Member Managing Director, Qatargas Member Member Mr. Hamad Rashid Al-Mohannadi Mr. Fahad Hamad Al-Mohannadi Vice Chairman & General Manager, General Manager, QEWC QAPCO Member Member Annual Report 2005 10 Qatar Petroleum Message from the Chairman 2005: A Golden Year for QP and Qatar By all measures, 2005 was a year of significant milestones and great achievements for Qatar Petroleum. This in turn, reflected positively on the economic performance of Qatar that has been improving rapidly in the past few years. In 2005, Qatar’s GDP achieved a nominal growth rate of 33.3%. This increase stemmed mainly from oil and gas sector revenues that contributed more than 60% of Qatar’s total GDP in 2005. A good part of this growth was driven by substantial oil price increases, but mostly due to well studied plans, hard work and very ambitious and diversified business strategies. The financial and operational results of Qatar Petroleum in 2005 were a continuation of our past years of stupendous performance. At present, Qatar Petroleum, with its resources, commitment, and experience accumulated since its inception thirty years ago, is implementing large scale projects aiming to achieve the strategy set by His Highness Sheikh Hamad Bin Khalifa Al-Thani, Emir of Qatar for the optimal utilization of our natural resources. For 2005, these projects included major expansions in the oil fields, LNG trains in RasGas and Qatargas and developing GTL, petrochemicals and refining plants. Such projects will definitely bring benefits to the Qatari economy and to the well-being of its citizens. They will also contribute to the creation of jobs and training opportunities for Qatari nationals. A major part of Qatar Petroleum’s strategy for the development of the hydrocarbon resources is to establish partnerships with leading international companies in the oil and gas business. We have created a healthy and attractive investment environment and carefully selected our partners. These partnerships give us access to a wide range of world class technical, marketing and management skills. Built upon positive cooperation and trust, our joint ventures have undertaken tens of billions of dollars in investment commitments during the next few years. In the oil sector, we aim to increase production capacity to one million barrels per day by 2009 while maintaining reasonable reserves depletion rates. The agreement between Qatar Petroleum and Maersk Oil Qatar, completed by the end of 2005, to further develop Al Shaheen offshore field, is the cornerstone of this objective. Production from this field will reach 525,000 barrels per day by 2009, which means that half of Qatar’s total oil production will be coming from Al Shaheen. In the gas sector, our achievements are truly remarkable by any standards. We have focused our attention on four main areas, which are LNG, GTL, pipeline export and feed to local industries and power plants. With natural gas reserves of 900 trillion cubic feet, which accounts for about 15 percent of the world’s total gas reserves, Qatar comes third worldwide in the size of its gas reserves. The first shipment of LNG was delivered to Japan ten years ago, at that time our production capacity was only 2.5 million tones per year. Since then, Qatar has embarked on ambitious plans to achieve the best utilization of the massive North Field gas reserves. Today, Qatar has reached a capacity of 25 million tons per year, and we are exporting LNG to customers in three continents around the world. Today, Qatar is ranked among the top LNG exporters in the world. We are currently pursuing an expansion plan to boost LNG production capacity to 77 million tons per year by 2012, which will involve the construction of the largest LNG liquefaction trains in the world with a nameplate capacity of 7.8 million tons-per-annum Annual Report 2005 11 Qatar Petroleum each. These expansions will enable Qatar to achieve the economies of scale needed to deliver gas at competitive prices to the most distant markets in the USA, Asia and Europe. These huge investments in the LNG value chain are expected to make Qatar the biggest global exporter of LNG by the end of this decade. To meet the transportation infrastructure needs of LNG export deals, Qatar Gas Transport Company (Nakilat) will own a huge fleet of LNG vessels, including some of the world’s largest that have a cargo capacity of 265,000 cubic meters. In addition to our LNG business, we are developing projects that convert gas into environmentally clean liquid fuels. The Oryx GTL plant, a joint venture between Qatar Petroleum and Sasol of South Africa, is expected to be opened in June 2006. Being the first Gas-to-Liquids plant in Qatar the completion of this plant will mark a significant milestone in our gas-based projects roadmap. Oryx is the biggest and most technically advanced gas-to-liquids plant in the world with a production capacity of 34,000 barrels per day of globally marketable and easily transportable liquid products and synthetic fuels. The worldwide demand for cleaner transportation fuels is growing strongly.