DOHA: Qatar can sustain oil prices as low as $60 per barrel, or even lower if the necessary steps are taken to adapt to the current global context, thanks to the country’s low production costs and the diversification of the economy, says former minister of energy and industry H E Abdullah bin Hamad Al Attiyah.
Abdullah bin Hamad told The Oil & Gas Year, Qatar 2015 in an interview: “In 1992, Qatar was only producing 350,000 barrels of oil per day. Our country’s energy industry has since then grown dramatically to become the natural gas giant it is today.
“Qatar is the world’s largest producer and exporter of liquefied natural gas, and has maximised output from its natural resources by diversifying into key industries like petrochemicals, but also aluminium and steel for instance. Qatar made the right investments in its energy industry, and overcame many challenges and accumulated the experience necessary to face the current context of lower oil prices,” Abdullah bin Hamad said, according to a release issued yesterday.
“Thanks to low production costs and the diversification of the economy, Qatar can sustain prices as low as $60 per barrel, or even below if the necessary steps are taken to adapt to the current global context. The State of Qatar needs a balanced and pragmatic budget that focuses on major on-going projects while rationalising expenses, and that is what is being done. The oil market is cyclical, we have to forget about $100 oil for now and adapt. The energy industry is responding quickly to market changes and Qatar Petroleum is adapting its strategy adequately,” Abdullah bin Hamad said.
About Opec, Abdullah bin Hamad confirmed that he did not expect the cartel to cut oil production during its next meeting on June 6 “unless other major non-Opec producers move in the same direction”. According to him, Opec can play the waiting game and “has no interest in cutting production because it could lose market share. Opec’s position as a swing supplier is not what is used to be in the 1990s, when the organisation’s market share was much larger. Market dynamics have changed due to the US shale revolution and the slowing growth of China and India, the biggest hydrocarbons consumers of the 21st century, who play a major role in shaping demand on global markets”.
Opec member states currently account for about 40 percent of the world’s crude oil production, and Opec oil exports account for 60 percent of oil traded at the international level.
Opec oil production increased to 31 million barrels per day in March 2015, a 890,000 barrels jump from February 2015.
The IEA expects global oil demand to average 93.6 million barrels per day in 2015. According to the agency, demand averaged 92.99 million barrels per day in Q1 2015, when production was at 94.55 million barrels per day.
Asked about the role of Iran in the region and potential market disruptions in the event of a lifting of Western sanctions over it, Abdullah bin Hamad said: “Opec has always managed to keep political issues out of the organisation’s discussions, thus ensuring stability and member states’ ability to best coordinate their hydrocarbons policies”, showing confidence in Opec’s ability to face potential challenges in the near future.
‘The Oil & Gas Year’ produces energy-focused reports in 35 hydrocarbons-rich countries worldwide, including Qatar where it has an office.
The Peninsula
