Editorial comment
This winter, the eyes of the world will be on Qatar; the hosts of the 2022 FIFA World Cup. The spotlight on this year’s tournament has been a little more intense than usual, with a wide range of issues dominating the headlines. Allegations of corruption in the awarding of the tournament to Qatar back in 2010 have long dogged FIFA, and a number of other off-the-field controversies have cast a shadow over the competition, including human rights issues and concerns surrounding the tournament’s sustainability pledges.
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As the goals start to fly in, the column inches will swiftly move towards the football itself, but the sociopolitical issues surrounding this year’s World Cup are likely to live on longer than the sporting achievements of the teams taking part.
Aside from the numerous controversies surrounding the tournament, the circumstances surrounding Qatar’s rise to prominence are quite extraordinary, and the country’s energy sector is at the heart of why it is capable of hosting one of the world’s premier sporting festivals. A recent article in the Financial Times (FT) explored how Qatar’s state-owned oil and gas group’s bold bet on LNG transformed the country’s fortunes and ultimately funded the majority of the new infrastructure (including a reported US$6.5 billion on new stadia and facilities alone) required to host the World Cup.1
Qatar was highly indebted and heading towards bankruptcy in the early 1990s before QatarPetroleum (now known as QatarEnergy) decided to develop LNG for export from Qatar’s North Field. The move was seen as a gamble – with BP pulling out of the project in 1992 over fears that it would not produce significant returns. In 1997, Qatar exported its first LNG to Spain, and the country became the world’s biggest LNG exporter in 2006. However, the state group did not stand still. It maximised its domestic gas production for export and announced huge expansion plans in 2017. In so doing, it partnered with energy majors such as Shell and Total, who invited QatarEnergy to join their projects around the world. QatarEnergy has now built a global portfolio of exploration projects.
Saad al-Kaabi, Qatar’s Energy Minister and Chief Executive of QatarEnergy, told the FT that the next chapter in the company’s evolution will be focused on international expansion, with plans to increase its production outside of Qatar from 45 000 boe/d to 5000 000 boe/d by 2030. The company is also looking to diversify its assets. It is exploring new crude oil finds in countries such as Namibia, as well as investing in petrochemical production and solar energy in Qatar. The company recently announced that it is proceeding with the construction of an integrated polymers facility on the US Gulf Coast, in partnership with Chevron Phillips Chemical Co. LLC (more details about this project can be found on p. 5 of this issue). This diversification of assets was highlighted by the company’s decision to change its name from QatarPetroleum last year, reflecting its new strategy to focus on energy efficiency and environmentally-friendly technology. However, as the piece from the FT points out, QatarEnergy has currently not set net zero emissions targets, and the company firmly believes that natural gas will be central to the world’s energy transition. Al-Kaabi said: “I agree with going green, but I always say gas is not a transition fuel, it is a destination fuel.”
QatarEnergy has amassed its fortune through a series of shrewd moves, and it will be interesting to see if it continues to thrive in a changing world.
- WILSON, T. and ENGLAND, A., ‘QatarEnergy: the company behind World Cup host’s wealth’, Financial Times, (18 November 2022).
