Qatar pulls out of Opec
Qatar o cially withdrew from the oil producers’ cartel, the Organisation of Petroleum Exporting Countries, on 1 January 2019. Energy Minister Saad Sherida al-Kaabi said in December 2018 that the withdrawal decision re ected Qatar’s desire to focus its e orts on plans to develop and increase its natural gas production from 77m tonnes per year to 110m tonnes in the coming years. In terms of oil, Qatar produced 600,000 barrels per day (bpd) in December, down from 610,000 bpd in the previous month and 730,000 bpd in 2013. The decision to quit Opec was seen as a response to continued blockade of its economy by Saudi Arabia, which is the largest Opec producer. Howev- er, Al-Kaabi insisted that the decision was not linked to the 19-month political and economic boy- cott of Doha. The decision is unlikely to have a major impact on global energy prices or policies. Qatar joined OPEC in 1961, one year after the organisation’s establishment.
Qatar eyes 2019 budget surplus
Qatar’s budget position is expected to improve further and end 2018 on a surplus, maintaining that balance into the next decade. Spending was expected to show modest overall annual growth in 2018 as restraint in current spending continued and as capital expenditure on large infrastruc- ture projects and the 2022 World Cup starts to atten out. Revenues will be boosted by higher hydrocarbon revenues as the full bene t of the doubling of crude prices from June 2016’s level was felt. The introduction of VAT in 2019 will raise revenues by around 1.25% of GDP, helping to even out the ow of government revenues. The International Monetary Fund used its October 2018 forecasts to set out a more benign path for the public nances. It now expects the budget to return to surplus in 2018 by 3.6% of GDP, rather than just 2.8% as forecast six months earlier. It then sees the surplus rising to 10.5% in 2019 and 11.5% in 2020, rather than 7.5% and 6.8% respectively in its April 2018 report. It then sees a surplus of 10.4% rather than 5.5% in 2021. Qatar de ed expecta- tions as it took in orders of more than $32bn after opening the books for $12bn of 5-, 10-, and 30-year sovereign bonds in April 2018. This was an even larger issue than rival Saudi Arabia’s $11bn sovereign bond issue in the same month. Qatar also issued a $9bn bond in June 2016 year with maturities of ve, 10 and 30 years. The country’s access to the international bond market has been complicated by the economic embargo by its neighbours. The country has built up foreign asset reserves mainly due to the activity of the Qatar Investment Authority, its sovereign wealth fund. Qatar has a reserve of $340bn including assets of its sovereign wealth fund that could help the country to withstand the isolation from its neighbours in the Gulf, the Governor Sheikh Abdulla bin Saud Al-Thani told CNBC in July 2017.