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Qatar energy minister says decision to leave OPEC not political

Quitting OPEC the week of one of its most intensely watched meetings was not meant to be a slap in the face to the organization, nor a statement against geopolitical rival Saudi Arabia, Qatar’s energy minister said.

Rather, the Gulf sheikhdom’s surprise exit effective January — announced Monday — had more to do with Qatar focusing on its gas potential and acknowledging its minnow status within crude producer bloc, newly appointed energy minister Saad Sherida al-Kaabi told reporters in Vienna, where he is set to attend his first, and last, OPEC meeting.
“We are small in OPEC,” Kaabi said, referring to Qatar’s approximately 600,000 b/d of crude production. “We don’t have enough weight in OPEC to have an effect, and that’s why we are leaving.”

The economic blockade of Qatar by OPEC kingpin Saudi Arabia and the UAE had nothing to do with the decision, he added.

“It is absolutely not a political decision,” Kaabi said. “Some people say it is because of the blockade [and] because of other political moves and so on. I am a technocrat all my life and I am a gas man all my life.”

But he said that he would not be meeting with Saudi counterpart Khalid al-Falih this week.

“I don’t think they want to meet me. They blockade my country,” Kaabi said.

The minister met Wednesday with ministers from OPEC members Iraq and Kuwait, plus non-OPEC Oman and Malaysia, among other countries, all of whom wished him and Qatar well, he said. He will meet Iranian oil minister Bijan Zanganeh Thursday morning.

UAE energy minister Suhail al-Mazrouei said the Qatari departure was “a pity,” but said he respected the country’s sovereign right to leave.

“We don’t understand it, but we respect it,” he said.

OPEC meets Thursday to debate the need for output cuts, which Saudi Arabia and other key members say are necessary to prevent oversupply in the first half of 2019. Russia and nine other key non-OPEC partners will join the talks Friday.

Qatar has been an OPEC member since 1961, but its crude production comprises less than 2% of the bloc’s output.

But producing almost 80 million mt/year of LNG along with close to 1 million b/d of condensate and LPG makes Doha a significant global energy supplier. In his announcement Monday, Kaabi said Qatar wished to focus on plans to expand its gas production to 110 million mt/year “in the coming years.”

FAREWELL SPEECH
Kaabi said he would attend the opening session of Thursday’s OPEC meeting and deliver a farewell speech to the group, before departing ahead of the closed session.

Asked why he decided to announce Qatar’s exit the week of the meeting, the minister said that was a function of him being appointed only a month ago and needing to clear the decision through various levels of government. Kaabi said the departure was his recommendation.

“I was behind the recommendation for this, and I have been known as the gas man for a long time,” he said. “So it just took time to go and get approvals from your leadership, because it’s a sovereign decision, not a ministerial decision, to leave OPEC.”

Omani oil minister Mohammed al-Ruhmy, who told S&P Global Platts Monday that he was shocked by the announcement, said Qatar could face retaliation, with some OPEC members withdrawing from the Gas Exporting Countries Forum hosted by Doha.

“I can tell you for sure the UAE will pull out of that organization,” Rumhy said in an interview. “I don’t think they will continue, and who knows [with] other countries like Algeria that are members of OPEC.”

Kaabi, however, dismissed those concerns.

“Any country is a sovereign country that has the right to choose their position, if the country wants to depart, it’s like we are free to depart from OPEC, they can depart from whatever they like,” he said. “What other countries want to do, we respect their decision to do what is best for their country.”
Source: Platts

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