reu-2018-12-03 Qatar leaves OPEC focus on gas
https://www.reuters.com/article/us-qatar-opec/qatar-to-leave-opec-and-focus-on-gas-as-it-takes-swipe-at-riyadh-idUSKBN1O20DT
Qatar to leave OPEC and focus on gas as it takes swipe at Riyadh
Eric Knecht
DOHA (Reuters) - Qatar said on Monday it was quitting OPEC from January
to focus on its gas ambitions, taking a swipe at the group's de facto
leader Saudi Arabia and marring efforts to show unity before this week's
meeting of exporters to tackle an oil price slide.
Doha, one of OPEC's smallest oil producers but the world's biggest
liquefied natural gas (LNG) exporter, is embroiled in a protracted
diplomatic row with Saudi Arabia and some other Arab states.
Qatar said its surprise decision was not driven by politics but in an
apparent swipe at Riyadh, Minister of State for Energy Affairs Saad
al-Kaabi said: "We are not saying we are going to get out of the oil
business but it is controlled by an organization managed by a country."
He did not name the nation.
Al-Kaabi told a news conference that Doha's decision "was communicated to
OPEC" but said Qatar would attend the group's meeting on Thursday and
Friday in Vienna, and would abide by its commitments.
He said Doha would focus on its gas potential because it was not
practical "to put efforts and resources and time in an organization that
we are a very small player in and I don't have a say in what happens."
Delegates at OPEC, which has 15 members including Qatar, sought to play
down the impact. But losing a long-standing member undermines a bid to
show a united front before a meeting that is expected to back a supply
cut to shore up crude prices that have lost almost 30 percent since an
October peak.
"They are not a big producer, but have played a big part in (OPEC's)
history," one OPEC source said.
It highlights the growing dominance over policy making in the oil market
of Saudi Arabia, Russia and the United States, the world's top three oil
producers which together account for more than a third of global output.
Riyadh and Moscow have been increasingly deciding output policies
together, under pressure from U.S. President Donald Trump on OPEC to
bring down prices. Benchmark Brent is trading at around $62 a barrel,
down from more than $86 in October. LCOc1
"It could signal a historic turning point of the organization towards
Russia, Saudi Arabia and the United States," said Algeria's former energy
minister and OPEC chairman, Chakib Khelil, commenting on Qatar's move.
"UNILATERAL DECISIONS"
He said Doha's exit would have a "psychological impact" because of the
row with Riyadh and could prove "an example to be followed by other
members in the wake of unilateral decisions of Saudi Arabia in the recent
past."
Qatar, which Al-Kaabi said had been a member of OPEC for 57 years, has
oil output of just 600,000 barrels per day (bpd), compared with Saudi
Arabia's 11 million bpd.
But Doha is an influential player in the global LNG market with annual
production of 77 million tonnes per year, based on its huge reserves of
the fuel in the Gulf.
OPEC members Saudi Arabia and the United Arab Emirates, and fellow Arab
states Bahrain and Egypt, have imposed a political and economic boycott
on Qatar since June 2017, accusing it of supporting terrorism. Doha
denies the charges and says the boycott aims to impinge on its
sovereignty.
Al-Kaabi, who is heading Qatar's OPEC delegation, said the decision was
part of a long-term strategy and the country's plans to develop its gas
industry and increase LNG output to 110 million tonnes by 2024.
"A lot of people will politicize it," Al-Kaabi said. "I assure you this
purely was a decision on what's right for Qatar long term. It's a
strategy decision."
Qatar's influential former prime minister, Sheikh Hamad bin Jassim
al-Thani, said on Twitter that OPEC "is only used for purposes that hurt
our national interests."
The exit is the latest example of Qatar charting a course away from its
Gulf neighbors since the rift began last year. It comes before an annual
summit of Gulf Arab states expected to grapple with the roughly 18-month
standoff.
Once close partners with Saudi Arabia and the UAE on trade and security,
Qatar has struck scores of new trade deals with countries further afield
while investing heavily to scale up local food production and ramp up
military power.
"There is a sentiment in Qatar that Saudi Arabia's dominance in the
region and the region's many institutions has been counterproductive to
Qatar," said Andreas Krieg, a political risk analyst at King's College
London. "It is about Qatar breaking free as an independent market and
state from external interference."
Oil surged about 5 percent on Monday after the United States and China
agreed to a 90-day truce in their trade war, but prices remain well off
October's peak.
Asked if Qatar's withdrawal would complicate OPEC's decision on output
this week, a non-Gulf OPEC source said: "Not really, even if it's a
regrettable and sad decision from one of our member countries."
Amrita Sen, chief oil analyst at consultancy Energy Aspects, said the
move "doesn't affect OPEC's ability to influence as Qatar was a very
small player."
Al-Kaabi said state oil company Qatar Petroleum planned to raise its
production capability from 4.8 million barrels of oil equivalent per day
to 6.5 million barrels in the next decade.
FILE PHOTO: Saad al-Kaabi, chief executive of Qatar Petroleum, gestures
as he speaks to reporters in Doha, Qatar, July 4, 2017. REUTERS/Naseem
Zeitoon
Doha also plans to build the largest ethane cracker in the Middle East.
Qatar would still look to expand its oil investments abroad and would
"make a big splash in the oil and gas business", he Al-Kaabi added.
Graphic: Who produces what within OPEC? tmsnrt.rs/2RxkhwC
Additional reporting by Florence Tan in Singapore, Rania El Gamal and Nafisa Eltahir in Dubai, Ahmed Ghaddar in Vienna and Lamine Chikhi in Algiers; Writing by Saeed Azhar and Ghaida Ghantous; Editing by Michael Georgy and Edmund Blair