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Gas-focused Qatar to exit OPEC in swipe at Saudi influence

Reuters  |  DOHA 

By Eric Knecht

DOHA (Reuters) - said it will quit OPEC to focus on gas in a swipe at Saudi Arabia, the de facto of the exporting group which is trying to show unity in tackling an price slide.

Doha, one of OPEC's producers but the world's biggest liquefied (LNG) exporter, is embroiled in a row with OPEC members and the

It said the surprise decision to exit OPEC, which has 15 members including Qatar, in January was not driven by and it did not name Saudi Arabia, but of State for Affairs said:

"We are not saying we are going to get out of the oil business but it is controlled by an organisation managed by a country," al-Kaabi said.

would attend an OPEC meeting scheduled for Thursday and Friday in and would abide by its commitments, he said, adding that Doha would focus on its

This was because it was not practical "to put efforts and resources and time in an organisation that we are a very in and I don't have a say in what happens," he added.

OPEC members and the United Arab Emirates, and fellow Arab states and Egypt, have imposed a political and economic boycott on since June 2017, accusing it of supporting terrorism, which Doha denies.

Qatar's former prime minister, Sheikh Hamad bin Jassim al-Thani, said on that OPEC "is only used for purposes that hurt our national interests".

The said Doha's decision was a reflection of its declining influence.

"The political aspect of Qatar's decision to quit OPEC is an admission of the decline of its role and influence in light of its political isolation," Anwar Gargash, UAE of state for foreign affairs, said on

OPEC's loss of a long-standing member undermines a bid to show a united front before a meeting that is expected to back a supply cut to shore up prices. Benchmark Brent is trading at around $62 a barrel, down from more than $86 in October.

"They are not a big producer, but have played a big part in (OPEC's) history," one OPEC source said.

It highlights the growing dominance over policy making in the of Saudi Arabia, and the United States, the world's top three which together account for more than a third of global output.

and have been increasingly deciding output policies together, under pressure from U.S. on OPEC to bring down prices.

"It could signal a historic turning point of the organisation towards Russia, and the United States," said Algeria's former and OPEC chairman, Chakib Khelil, commenting on Qatar's move.

"UNILATERAL DECISIONS"

He said Doha's exit would have a "psychological impact" because of the row with and could prove "an example to be followed by other members in the wake of unilateral decisions of Saudi Arabia in the recent past."

Qatar, which Al-Kaabi said had been a member of OPEC for 57 years, has of just 600,000 barrels per day (bpd), compared with Saudi Arabia's 11 million bpd.

But Doha is an in the global LNG market with annual production of 77 million tonnes per year, based on its huge reserves in the Gulf.

Al-Kaabi, who is heading Qatar's OPEC delegation, said the decision was part of a long-term strategy and the country's plans to develop its and increase LNG output to 110 million tonnes by 2024.

"I assure you this purely was a decision on what's right for Qatar long term. It's a strategy decision," Al-Kaabi said.

The exit is the latest example of Qatar charting a course away from its Gulf neighbours since the rift began last year. It comes before an annual summit of states expected to grapple with the roughly 18-month standoff.

Once close partners with Saudi Arabia and the UAE on trade and security, Qatar has struck scores of new trade deals with countries further afield while investing heavily to scale up and ramp up military power.

"There is a sentiment in Qatar that Saudi Arabia's dominance in the region and the region's many institutions has been counterproductive to Qatar," said Andreas Krieg, a at London. "It is about Qatar breaking free as an independent market and state from external interference."

Oil surged about 5 percent on Monday after the and agreed to a 90-day truce in their trade war, but prices remain well off October's peak.

Asked if Qatar's withdrawal would complicate OPEC's decision on output this week, a non-source said: "Not really, even if it's a regrettable and sad decision."

Al-Kaabi said company planned to raise its production capability from 4.8 million barrels of oil equivalent per day to 6.5 million barrels in the next decade.

Doha also plans to build the largest in the and it would still look to expand its abroad, Al-Kaabi added.

(Additional reporting by in Singapore, Rania El Gamal and Nafisa Eltahir in Dubai, Ahmed Ghaddar in and in Algiers; Writing by and Ghaida Ghantous; Editing by Michael Georgy/Edmund Blair/Alexander Smith)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, December 03 2018. 21:57 IST
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