• 2 minutes Rational analysis of CV19 from Harvard Medical School
  • 4 minutes While U.S. Pipelines Are Under Siege, China Streamlines Its Oil and Gas Network
  • 7 minutes Renewables Overtake Coal, But Lag Far Behind Oil And Natural Gas
  • 12 hours China wields coronavirus to nationalize American-owned carmaker
  • 13 mins Joe Biden the "Archie Bunker" of the left selects Kamala Harris for VP . . . . . . Does she help the campaign ?
  • 3 hours Open letter from Politico about US-russian relations
  • 3 days China's impending economic meltdown
  • 23 hours US will pay for companies to bring supply chains home from China: Kudlow - COVID-19 has highlighted the problem of relying too heavily on one country for production
  • 3 days Trumpist lies about coronavirus too bad for Facebook - BANNED!
  • 3 hours Oil Tanker Runs Aground in Mauritius - Oil Spill
  • 3 days Why Oil could hit $100
  • 3 days Biden Seeks $2 Trillion Clean Energy And Infrastructure Spending Boost
  • 13 hours Trump is turning USA into a 3rd world dictatorship
  • 2 days Liquid Air Battery
  • 3 days The Truth about Chinese and Indian Engineering
  • 3 days Brent above $45. Holding breath for $50??

Crisis Fuels Qatar’s New Gas Boom

The current energy market crisis could benefit Qatar and fuel a second gas boom, PwC said in a report, as cited by the Gulf Times.

The world’s top exporter of liquefied natural gas three years ago surprised markets by lifting a drilling moratorium from the offshore North Field, which it shares with Iran. In 2019, Qatar then said it would boost LNG production from 77 million tons currently to 126 million tons by 2027. The decision seemed to be motivated both by growing demand for LNG and also growing competition, notably from Australian and U.S. projects.

In February this year, the country decided to delay the North Field expansion amid the slump in LNG prices driven by a global oversupply, but the plan through 2027 remained. Now, Qatar is set to benefit from this glut.

“The most important economic development in many years was the surprise announcement by Qatar Petroleum in November that new appraisals had extended estimates of both the geographic scope and volume of North Field,” PwC said in its report. As a result of these new appraisals, the North Field—the largest gas field in the world—has been found to extend onshore as well, with reserve estimates doubled to 1,760 trillion cu ft of gas and 70 billion barrels of condensates.

Meanwhile, many private companies, especially in the United States, are being forced to delay the construction of more LNG capacity because of the price depression. Some projected facilities may never see the light of day unless gas prices improve soon. Against this background, Qatar will win more market share as the competition shrinks, as it remains the cheapest LNG producer.

“Even at current production levels, analysis from the IMF and ratings agencies give Qatar the lowest breakeven oil price in the region and the Minister of Finance has said the breakeven price should fall further to under $40 after 2022, even before the new LNG capacity comes online,” PwC analysts said in the report.

By Michael Kern for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage



Leave a comment
  • Mamdouh Salameh on July 20 2020 said:
    Qatar’s economy has been the bright spot among the Gulf Cooperation Council’s (GCC’s) economies. Not only it has managed to withstand a Saudi-led siege against it, but it continued to grow faster than the other GCC economies.

    The fact that Qatar’s revenues come overwhelmingly from being the world’s largest producer and exporter of LNG means that it is far less vulnerable to the volatility of oil prices like other GCC countries and other oil-producing nations.

    And as luck has it, even geology is enhancing Qatar’s energy credentials. Qatar Petroleum announced that new appraisals of the North Field, the largest gas field in the world it shares with Iran, have found it to extend onshore as well, with reserve estimates doubled to 1,760 trillion cubic feet (tcf) of gas and 70 billion barrels of condensates.

    Moreover, Qatar has plans to boost LNG production from 77 million tons (mt) currently to 126 mt by 2027 in order to consolidate its position as the world’s top LNG producer and exporter well into the future.

    And to add to its energy accolades, Qatar’s budget breakeven oil price is projected to decline to $40 a barrel by 2022 compared with $80-$120 for the majority of OPEC members.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News