With daily oil production of around 600,000 to 700,000 barrels and a larger natural liquefied gas profile, Qatar has decided to exit the Organisation of Petroleum Exporting Countries (OPEC) in 2019, to leverage on growing its LNG portfolio.
The country’s decision was announced on Monday by the Energy Minister, Saad al-Kaabi.
This statement is coming just three days before another crucial meeting between the crude oil cartel and its alliance of non members on the sixth of December in Vienna, the Austrian capital. At that meet, OPEC will decide whether to reduce its production output further to mitigate against rising oil supplies.
Qatar is the world’s largest LNG exporter and al-Kaabi says the country wants to increase its output from 77 million standard cubic feet daily to 110 million scuf.
“Qatar has decided to withdraw its membership from OPEC effective January 2019,” al-Kaabi informed at a Doha press conference, adding that Qatar would still continue to produce oil but would concentrate on gas production.
He emphasised at the press conference that the decision to leave OPEC was independent of the diplomatic spat with Saudi Arabia and UAE.
“We don’t have great potential [in oil], we are very realistic. Our potential is gas,” al-Kaabi said.
This step by Qatar is an attempt to give more value to gas, which is usually costed against oil when companies make capital and operating expenditure decisions.
The surprising move by Qatar may spur country’s like Nigeria, ninth largest exporter, to value their gas more and define a set of finance terms aimed at getting extra value from the natural resource.