Coleman, Gina, The Middle East
The rate of industrial, economic and social change in Qatar over the past three years has undoubtedly outstripped that of its five Gulf Cooperation council (GCC)) neighbours. Yet the state, with a total population of just under 600,000 (according to the government's 1997 census), is geographically the second smallest of the political and economic grouping. Whilst the World Bank's April 1997 report predicted phenomenal growth through to the new millennium, there are those overseas observers who have questioned whether the level of investment and pace of development is justified for such a small country. Locally, bankers say "it is, and the figures speak for themselves."
OIL, GAS AND PETROCHEMICALS
As with other Gulf States, Qatar emerged from its turn-of-the century fishing and pearling industries with the discovery of oil just prior to the outbreak of Word War II. Fluctuations in global oil prices have greatly impacted the economy since then, both with the record highs of the 1970s and the subsequent slumps. Twice this year Qatar, along with other OPEC members, agreed to cuts in oil production to stabilise prices, and followed a 20,000 barrels per day (bpd) cut in April by a second 30,000 bpd reduction effective from 1 July.
However, on the same day the April cuts were announced, the State-owned Qatar General Petroleum Corporation (QGPC) signed a new exploration and production-sharing agreement with Chevron Overseas Petroleum (Qatar) for onshore hydrocarbon exploration. Minister of Energy and industry, Abdullah Bin Hamad Al Attiyah, who is also board chairman of QGPC told Qatar News Agency: "The agreement, the 10th between QGPC and foreign companies to explore oil and gas in Qatar, falls within the State's policy of increasing the country's hydrocarbon reserves base, enhancing oil and gas production capabilities, and expanding those industries to diversify national income and firm the State's economic base."
With new exploration and more sophisticated recovery techniques applied to existing fields, oil production has almost doubled over the last couple of years, from under 400,000 bpd to over 700,000 bpd. Occidental Petroleum ("Oxy") were awarded a contract in late 1997 to develop a new field ("South Dome") with up to an estimated 300 million gross barrels of recoverable oil near their highly successful Idd El Shargi North Dome enhanced oil recovery (EOR) project. At Idd E1 Shargi, the company "increased gross production to 107,000 bpd at year end 1997, from 20,000 bpd in mid 1994", according to the 1997 annual report. The company predicts that production will climb to 160,000 bpd in 1999. Occidental's net share averaged 44,500 bpd in 1997, (58,000 at year end). Maximum production from the South Dome is expected to be 50,000 bpd, with Occidental having an average 44 per cent net interest over the life of the field.
The French company, Elf, is also reportedly seeking an approval to increase output from the Al Khaleej offshore field, from the current 30,000 bpd to 50,000 level and then up to 80,000 bpd.
With oil prices at an average of $19.70 over 1997, some local bankers say additional revenue more than compensated for the subsequent slump in prices. (USS1 = QR3.65) However, others attribute budget cuts and the delays in a number of infrastructure projects in the country to the oil market glut and its implications.
Recognising the hazards of an economy that had been almost totally dependent on oil revenues, the Qatari government has for several years stressed a policy of diversification. Rapid strides in economic and industrial development have taken place since the current Emir, Sheikh Hamad Bin Khalifa Al Thani, assumed power from his father in June 1995, in a move backed by the ruling Al Thani family.
Sheikh Hamad, who had been increasingly involved in the running of state affairs prior to 1995, encouraged the government to actively promote the private sector, but it also poured huge resources into the development of natural gas. …