How the Tiny Nation of Qatar Became One of the World’s Most Dominant Fossil Fuel Producers
There are many countries around the world that have fossil fuel reserves, but very few have had as much success extracting these resources as the tiny country of Qatar. The Connecticut-sized nation of Qatar occupies a small desert peninsula in the Persian Gulf and holds one of the world’s largest reserves of petroleum and natural gas. Unlike the countries of Venezuela, Iraq, Libya, and Nigeria that fell victim to what is known as the resource curse (a paradox where countries with an abundance of fossil fuels have experienced less democracy, less economic growth, and fragmented development when compared to countries with fewer fossil fuel reserves), Qatar has made wise investment decisions that have led the country to achieve the highest per-capita GDP in the world at $98,800 (Jacobs, 2014). Moreover, with an average income of $125,000, Qatar’s citizens enjoy average annual earnings that are nearly twice that of the United States or Saudi Arabia (Walsh, 2018). While this energy-rich Arab nation now boasts one of the highest standards of living in the world, Qatar hasn’t always been known for its high quality of life.
Source: Pixabay, Pexels
Fossil Fuel Production
Throughout much of the 20th century, Qatar was known as a barren peninsula filled with desperately poor citizens that struggled to make a living. Even though neighboring Saudi Arabia seemed to be awash in oil reserves, Qatar lagged behind economically for decades. However, things would start to change after 1971 when the world’s largest natural gas field was found just offshore of Qatar. When technology in the early 1990s allowed natural gas to be liquified, Qatar’s gas boom exploded. After Sheikh Hamad bin Khalifa al-Thani invested $20 billion into a massive natural gas liquefaction plant on Qatar’s north coast, the country was able to produce 30 percent of the global natural gas supply by 2010 (Walsh, 2018). While Qatar also holds both onshore and offshore oil reserves along the western coast at Dukhān and near the eastern coast, they are modest in size in comparison to the enormous natural gas fields along the north coast.
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Reducing Dependence on Petroleum
Much of Qatar’s economic success came as a result of the decision to reduce its dependence on petroleum and shift resources towards the development of natural gas processing facilities. When oil prices were high in the early 21st century, Qatar pursued a strategy to invest heavily in natural gas infrastructure, which has led to its economic success that the country is known for today. While other oil-producing nations experienced economic shocks when oil prices collapsed below $30 a barrel, Qatar’s decision to boost natural gas production has created stability for its economy. Today, the country produces 77 million tons of LNG annually and plans to increase its capacity by up to 43% by 2024 (Gamal, 2018).
Even though Qatar’s natural gas reserves are estimated to be around 896 trillion cubic feet, the country is still also involved in the petroleum market (Jacobs, 2014). As a result of Qatar’s desire to expand its oil business, the country recently decided to leave the Organization of the Petroleum Exporting Countries (OPEC) so that it could increase oil production. Qatar Petroleum, the state-owned petroleum company of Qatar, currently produces about 600,000 barrels of oil per day, but plans to increase output over the next 8 years (CBC, 2018). Part of the increase in oil production for Qatar Petroleum will come from the US, where Qatar recently invested over $20 billion and became majority owner of the Golden Pass Gas terminal in Texas (Gamal, 2018). Through these sustained investments, the tiny nation of Qatar will continue to be one of the world’s most dominant and successful producers of fossil fuels for the foreseeable future.
CBC. (2018). “Qatar to leave OPEC and set own oil and gas output.” Canadian Broadcasting Corporation.
Gamal, R. (2018). “Qatar Petroleum to invest $20 billion in U.S. in major expansion.” Reuters.
Jacobs, H. (2014). “How Qatar got so rich so fast.” Business Insider.
Walsh, D. (2018). “Tiny, Wealthy Qatar Goes Its Own Way, and Pays for It.” New York Times.