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Qatar oil reserves to last at least 138 years

Qatar National Bank (QNB) says in a report that Qatar's gas reserves can last 138 years on current output rates

Qatar is the world's largest LNG exporter.
Qatar is the world's largest LNG exporter.

Amidst lower oil prices, Qatar National Bank (QNB) has stated that Qatar is likely to remain vital to global hydrocarbon markets for a number of years to come. Its prediction is based on new data for 2014 released in BP's Statistical Review of World Energy report.

After the US and Russia, Qatar remains the third largest producer of natural gas in the world with 5.1% of global production. It is also the world's top exporter of liquefied natural gas (LNG) cornering 31% of total global exports in 2014, owing to its large of hydrocarbon reserves.

The country remains ahead of the other major oil and gas producers with 83.6k barrels of oil equivalent (boe) in 2014, in terms of oil and gas reserves per capita. The country’s hydrocarbon exports provide a steady source of infrastructure investments, driving the growth and diversification of the domestic economy.

Recent oilfield exploration and development projects have led to an increase in the level of proven oil reserves, with the report from BP outlining that reserves of oil and other liquids had risen 2.6% to 25.7bn barrels in 2014.

However, in 2014 owing to the moratorium on further gas development and exploration in the North Field – where almost all of Qatar's gas reserves are situated – gas reserves fell 0.6% in the country, as a result of the ongoing extraction of gas in the absence of the development of new reserves.

In 2014, in the shadow of the moratorium, Qatar's total hydrocarbon output remained unchanged at 5.2mn barrels of oil equivalent per day constituting 3.2mn from gas and 2.0mn from oil.

As Qatar's oil fields are maturing, the minimal increase of 0.4% in gas production in 2014 was counterbalanced by a decline in oil production in 2014 (-0.8%). However, the large investment projects should help to stabilise oil production, such as the $4bn Bul Hanine, which plans to update facilities and increase production from 40,000 bpd to 95,000 bpd.

Substantial investment in LNG facilities over the last 20 years, along with an increase in production, has made Qatar the world's largest LNG exporter, creating the establishment of a global LNG market.

The rise of LNG exporters has made it possible to move natural gas around the globe, opening up a new source of clean energy for many countries, motivating them to invest in infrastructure to import and regasify LNG. Most of Qatar's gas production is exported as LNG (58% in 2014).

This trend towards a cleaner source of energy, as well as strong economic growth, have made the Asia Pacific region the largest market for Qatar's LNG exports, taking 72% of Qatar's exports in 2014.

Also, Europe and the UK have been prompted to switch to LNG, as the price is cheaper, relative to piped-gas, resulting in the UK increasing its imports of LNG from Qatar by 20.5% in 2014.

The domestic energy demand is expected to rise steeply as the population continues to grow with the influx of expatriates working on the country's large infrastructure programme.

The Barzan project – a $10.3bn North Field gas development to increase production for domestic use – is coming online to address this demand and is expected to drive growth in the hydrocarbon sector, with the first production expected during the second half of this year, QNB said.

Looking ahead, Qatar is expected to keep its leading role in the global hydrocarbon sector and global demand for clean energy is expected to continue rising.

The report said oil production is expected to stabilise, leading to an increase in real GDP growth in the hydrocarbon sector to 0.8% in 2015, 1.8% in 2016 and 1.9% in 2017.

"We expect the non-hydrocarbon sector to grow at around 10.8% in 2015-17, driven by investment in major infrastructure projects. This should lead to overall growth of 7% in 2015, 7.5% in 2016 and 7.9% in 2017," QNB said.

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