ibusinesslines.com December 16, 2018

Qatar will withdraw from OPEC effective January 2019: Minister

03 December 2018, 12:13 | Kelvin Horton

Qatar pulls out of Opec oil producers' cartel

Qatar’s exit puts question mark on OPEC’s future

Qatar's energy minister said the decision to withdraw had not been not easy after 57 years of Opec membership, but noted that the country's impact on the cartel's production decisions was small.

Qatar, which has spent much of the last few months fighting diplomatic battles, is withdrawing from the Organization of the Petroleum Exporting Countries (Opec), the country's energy minister announced today.

He added, "Qatar has worked diligently during the past few years to develop a future strategy based on growth and expansion, both in its activities at home and overseas".

Saudi Arabia and its allies, including the United Arab Emirates, Bahrain, and Egypt, imposed an economic blockade against Qatar, accusing the Gulf state of backing terrorists and destabilizing the region.

The withdrawal decision reflects Qatar's intent to focus its efforts on developing its natural gas industry, the minister said, as the Gulf Arab state moves to increase LNG production from 77 million to 110 million tonnes annually.

The announcement comes days before the Opec summit in Vienna.

That meeting is expected to set a policy for 2019 and despite Qatar's announcement, oil prices soared on Monday after Russian Federation and Saudi Arabia renewed a pact to cap output.

One Opec source told Reuters the decision was more symbolic than anything else.

He said geopolitics was not factor in the decision.

Now Qatar will be able to produce at whatever level it wants, she said, "but I wouldn't see it as a threat to Opec's efforts to cut their production because [Qatar] is not capable on its own of flooding the market".

Al-Kaabi said the decision to increase the supply of natural gas is to "develop a future strategy based on growth and expansion, both in its activities at home and overseas".

Quicktake: Why are oil prices plunging? "This has jolted the price of oil higher especially the fact that Canada's largest oil-producing province is curbing the output".

Qatar, a country of 2.6 million people, discovered the offshore North Field in 1971, the same year it became independent.

Apart from petroleum, Qatar's other energy resources include natural gas.

The Opec is a 15-nation strong organisation of countries that have rich oil reserves.

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