Qatar fulfilling oil & gas deals despite Gulf crisis
Qatar, the world’s largest exporter of liquefied natural gas, is fulfilling all of its contracted shipments of oil and gas despite a regional political crisis that led to the severing of ties with some of its neighbors, the Gulf country’s energy minister said.
The diplomatic feud with fellow OPEC members Saudi Arabia and the United Arab Emirates isn’t hindering Qatar’s energy production or expansion plans, Mohammed Bin Saleh Al Sada, minister of energy and industry, said at a meeting with foreign diplomats in Doha. “During this blockade we have never missed a single shipment of oil or gas to any of our consumer partners,” Al Sada said Tuesday. “That shows how committed Qatar is, not only to our economy and reliability but also to consuming countries.”
Saudi Arabia, the UAE, Egypt and Bahrain cut off diplomatic, trade and transport ties with Qatar three months ago. Efforts to negotiate a solution have languished. Qatar has announced plans to boost production at the North Field, its share of the world’s biggest offshore gas deposit, since the spat began. “We made a lot of efforts not to miss a shipment and continue that reputation of utmost reliability,” Al Sada said. For example, Qatar didn’t declare force majeure, a legal status protecting a party from liability if it can’t fulfill a contract for reasons beyond its control, he said. Efforts by the Organization of Petroleum Exporting Countries and other major oil producers to stabilize prices by pumping less crude are having some success, and it would be “appropriate” for them to extend their output-cuts accord beyond March, Al Sada said. The producers agreed in December to reduce output by about 1.8 MMbpd to bolster prices. They extended their six-month accord through March 2018 and may consider prolonging the cuts further, ministers from Saudi Arabia, Venezuela, the United Arab Emirates and Russia have said.
Qatar, OPEC’s fourth-smallest producer, pumped 610,000 bopd in August compared with more than 700,000 bbl daily in 2014, when crude averaged $100/bbl. The Gulf state agreed to pare output to 618,000 bpd under an OPEC accord reached in November. Benchmark Brent crude is currently trading at about $54/bbl. State-owned Qatar Petroleum is seeking within seven years to boost its LNG output to 100 million tons a year from about 77 million tons currently. Total started producing Shaheen crude from offshore deposits in July.
Source: Anthony Dipaola for Bloomberg