Qatar Ambitions Soar After OPEC Exit With $20 Billion US Expansion

After Qatar’s historic and unprecedented early December announcement that the small, gas-rich Gulf state will exit OPEC effective Jan. 1 following nearly 60 years of membership, Qatar Petroleum CEO Saad Sherida al-Kaabi announced over the weekend that the state-owned oil and gas company plans to invest more than $20bn in the US oil and gas sector

As reported by Reuters on Sunday, al-Kaabi’s main concern appears to be over its long term plans in the United States, specifically its majority stake of the Golden Pass LNG terminal in Texas. He cited current proposed “NOPEC” legislation, or No Oil Producing and Exporting Cartels Act, which aims to enable the US to extra-territorially impose its domestic legislation on others by giving the government the right to sue OPEC and OPEC+ countries like Russia because of their coordinated efforts to control oil prices. A decision over staying the course for its Golden Pass LNG project expansion is expected “within weeks”.

Docked LNG carriers, via Lloyd’s Maritime Intelligence

And this comes at a time when President Trump has been unrelenting in his criticisms of OPEC, blaming the organization for increasing the price of oil while leaning on the Saudis to produce more to help him drive oil prices even lower.

Qatar’s exit has been telegraphed as a huge blow to rival GCC state Saudi Arabia — de facto leader of the global oil cartel — after the kingdom led its GCC partners in waging economic and diplomatic warfare against Qatar (a complete blockade to be precise) since an open rift in June 2017, accusing it of supporting terrorism and boosting Iran.

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Especially since the Oct. 2 Saudi murder of journalist Jamal Khashoggi and slow drip of Turkish media leaks revealing the shocking details, the Qataris see Riyadh as unduly leveraged by the White House, accelerating production to appease Trump. However, we should note that Qatar has been spinning its exit from OPEC has having no political overtones.

Additionally, al-Kaabi announced new foreign partners for the construction of liquefied natural gas (LNG) trains for its LNG expansion project, including with Italian oil giant Eni, among others operating in Qatar (Exxon Mobil, Total, Royal Dutch Shell). Plans to build four liquefaction trains for the LNG expansion is part of a broader goal of boosting capacity to 43 percent by 2023-2024, according to Reuters.

Saad Sherida Al-Kaabi, President and CEO of Qatar Petroleum, via QP

Concerning the newly announced $20 billion investment push in the US, QP is looking “at gas and oil, conventional and non-conventional,” according to Kaabi’s statements Sunday. “We are looking for a lot of things (in our partners) including asset swaps, things that will help me in my international expansion,” he said. “If I don’t get good deals, nobody will come.”

And separately, QP will make its second foray in Mexican oil and gas, announcing it entered into an agreement with Eni to buy a 35% stake in three oilfields offshore Mexico, which include the Amoca, Mizton and Tecoalli offshore sites. Al-Kaabi said this “strengthens” Qatar Petroleum’s “international footprint” and “expands its presence in Mexico.”

Last January QP secured exploration rights to five blocks off the coast of Mexico in the Campeche and Perdidio basins, along with Eni and Shell respectively. Al-Kaabi added of the project, “we look forward to collaborating with Eni to ramp up production to around 90,000 barrels of oil per day by 2021.”

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Previously Al-Kaabi summarized Qatar’s ambitions in leaving OPEC as follows:

Achieving our ambitious strategy will undoubtedly require focused efforts, commitment and dedication to maintain and strengthen Qatar’s position as the leading LNG producer.

I would like to reaffirm Qatar’s pride in its international standing at the forefront of natural gas producers, and as the biggest exporter of LNG.

And as we explained previously this is no mere hyperbole or empty boasting as Qatar is already the world’s largest LNG producer, with some 77 million tons per annum of liquefaction capacity, though that lead is not being challenged by Australia as it finally completes its massive LNG project expansion boom.

Yet, going forward, Qatar will far outpace any of its LNG exporting rivals, both Australia, Russia and even the U.S. as the country enters its so-called second phase of LNG project development. Last year, in a surprise statement, Qatar announced that it would boost LNG production to 100 mtpa within the next five or six years – a remarkable decision given LNG development in other parts of the world that will all be vying for the same market share. 


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