Qatar quits Opec ahead of gas surge

The Daily Telegraph - Business - - Front Page - By Jil­lian Am­brose

QATAR has quit its mem­ber­ship of the Or­gan­i­sa­tion of Petroleum Ex­port­ing Coun­tries (Opec) just days ahead of its oil mar­ket meet­ing this week af­ter al­most six decades within the car­tel.

The gas-rich Gulf state said its at­ten­dance at the Opec meet­ing in Vi­enna this week will be its last as it pre­pares to as­sert its dom­i­nance in the global gas mar­ket.

The un­ex­pected exit has raised fresh doubts over the fu­ture of the oil pro­duc­ers’ car­tel, which in re­cent years has re­lied on aid from a Rus­sian-led group of oil na­tions to bring the mar­ket to heel.

It is also deep­ens the rift be­tween Qatar and Saudi Ara­bia, Opec’s de facto leader, af­ter Saudi Ara­bia’s diplo­matic crack­down on its neigh­bour last sum­mer.

Riyadh and its al­lies plunged the penin­sula state into cri­sis by im­pos­ing se­vere travel re­stric­tions along­side eco­nomic sanc­tions, which threat­ened to iso­late Qatar within the Mid­dle East. Saad al-Kaabi, Qatar’s min­is­ter of state for en­ergy af­fairs, de­nied that

Con­tin­ued from Page 1 its de­par­ture from Opec is po­lit­i­cally mo­ti­vated, but still took a swipe at the Saudi-led oil bloc.

“We are not say­ing we are go­ing to get out of the oil busi­ness, but it is con­trolled by an or­gan­i­sa­tion man­aged by a coun­try,” he said, with­out nam­ing the coun­try specif­i­cally. “It was purely a busi­ness de­ci­sion for Qatar’s fu­ture strat­egy to­wards the en­ergy sec­tor.”

Qatar plans to flex its global en­ergy mar­ket might through a se­ries of ma­jor gas project deals to build on its po­si­tion as one of the world’s most pow­er­ful nat­u­ral gas play­ers.

It holds the world’s largest re­serves of gas, which is poised to be­come the world’s fastest grow­ing source of en­ergy as emerg­ing economies turn their backs on coal.

Un­der the plans, Qatar will boost its pro­duc­tion of liq­ue­fied nat­u­ral gas, which is shipped to coun­tries in­clud­ing the UK, from 4.8m bar­rels per day to 6.5m bar­rels, he said.

By con­trast, Qatar pro­duces less than 2pc of Opec’s oil out­put. As the 11th largest pro­ducer of the car­tel’s 15 mem­bers, Qatar is un­likely to pose a threat to Opec strat­egy by grow­ing pro­duc­tion. How­ever, the Qatari dis­sent threat­ens to stoke grow­ing dis­sat­is­fac­tion among Opec na­tions over Saudi lead­er­ship, which could frac­ture sup­port for oil pro­duc­tion con­trols within the splin­tered group.

Ash­ley Kelty, of Can­tor Fitzger­ald, said many mem­bers are wary of how much in­flu­ence Don­ald Trump has over Saudi Ara­bia, “and whether this leads to de­ci­sions that are not nec­es­sar­ily in the best in­ter­ests of Opec”.

“The Saudis are cer­tainly go­ing to have to work harder to main­tain agree­ment be­tween the group on pro­duc­tion cuts,” Mr Kelty said.

Opec+, which in­cludes large oil pro­duc­ers such as Rus­sia and Mex­ico, is ex­pected to rein in oil ex­ports to help shore up mar­ket prices af­ter one of the steep­est price falls since the 2015 mar­ket col­lapse. The price of Brent crude dropped to be­low $60 a bar­rel last week, from $85 in Oc­to­ber, and climbed ten­ta­tively back to over $61 a bar­rel yesterday.

Saad al-Kaabi, Qatar’s en­ergy min­is­ter, claims the move is not po­lit­i­cally mo­ti­vated

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