THANKS TO A COMPREHENSIVE STATE PROGRAM, THE EMIRATE IS DEVELOPING AT AN ACCELERATED PACE

E. O. KASAEV, Candidate of MGIMO (U) of the Ministry of Foreign Affairs of the Russian Federation

Qatar Keywords:, national development strategy, gas, oil, construction, investment

The relatively small Middle Eastern State of Qatar has recently attracted the attention of economists from many countries of the world, primarily due to its exceptionally high rates of economic development. However, there are also objective reasons for this - the huge reserves of hydrocarbons that Qatar supplies to dozens of countries.

How does the country manage solid financial resources from the sale of oil and gas wealth?

Many aspects that characterize the modern development of the emirate deserve, in our opinion, close attention of experts from Russia.

In the spring of 2011, the Qatar National Development Strategy 2011 - 2016 (hereinafter referred to as the Strategy 2011 - 2016)came into force¹. The document is based on the country's modernization program - "National Vision 2030", according to which the state will ensure the growth of humanitarian, social, economic areas, as well as environmental protection.

THE FOUR PILLARS OF DEVELOPMENT

The humanitarian section of the five-year Strategy focuses on qualitative improvements in health and education. In particular, in April 2011, the launch of the "National Health Strategy" was announced, which focuses on providing residents with almost all possible medical care today, as well as continuing research work in this area. At the same time, it is taken into account that the country's population (currently 1.7 million people, 300 thousand of them are indigenous Qataris, the rest are immigrants) will increase annually by at least 2.1% and in 2016 will amount to about 2 million ². Often, medical care for Qatari residents is provided at public expense.

The social program aims to improve the quality of life and emphasizes the extremely important role of the family in the upbringing of the younger generation. This should be facilitated by holding all kinds of free cultural events: exhibitions, various festivals, visits to museums, organization of music programs related, among other things, to international sports competitions. Sponsors will include not only local government agencies, but in some cases large foreign companies such as Exxon Mobil, Royal Dutch Shell, and Rolex.

The cornerstone of all transformations in Qatar is a harmonious economic development of the country, the core of which is the production of hydrocarbons, as well as the subsequent export of liquefied natural gas (LNG) and oil. However, according to the five-year plan, after 2012, the oil and gas sector will give way in terms of development to other sectors of the economy: petrochemicals, metallurgical production, and agriculture. In 2015, after the lifting of the moratorium on further development of the huge Severnoye gas field, hydrocarbon production will once again become the emirate's economic development leader.

Nevertheless, economic diversification remains an important strategic goal. In this regard, great hopes are pinned on the recently created National Technology Park, where the production of solar panels for cheap electricity is organized, highly economical electric lamps of the latest generation are being developed, as well as the latest water desalination systems.

Large funds are planned to be invested in Qatar's infrastructure: multi-lane highways, a metro with surface and underground lines and stations, an upgraded airport with a capacity of up to 50 million passengers per year, and a new seaport in Mesaid.

Special attention is paid to the construction of facilities related to the 2022 FIFA World Cup. These are, first of all, 9 modern stadiums with an open air conditioning system.

The total volume of investments in 2011-2016 will amount to about $225 billion.³

It is important to note that the state program provides benefits and financial assistance to small and medium-sized enterprises, which should provide more than 30% of agricultural production by the end of the five-year plan, using opportunities for this both at home and abroad. Qataris have already bought farmland in various countries (for example, in Sudan, Egypt, Argentina, Australia), and negotiations are underway to buy land for agricultural production in Brazil, Georgia, and Ukraine.

The Emirate has some of the lowest lending rates for small and medium - sized businesses - from 2.55% to 7-8% per annum, depending on the size of the country.-

Table

Qatar's economic development (current results and forecast)

Source: IMF, Qatar National Development Strategy 2011-2016.

depending on the loan maturities. However, such attractive conditions apply only to those enterprises where the Qatari side has 51% of the shares.

It is noteworthy that the state is implementing an active program of "Qatariization", according to which all state institutions, as well as large companies, recruit mainly Qataris and only then - all the others.

The first five-year plan calls for sustained GDP growth and the overall Qatari economy. However, if in 2011 GDP grew by a record 18.7% (in 2010 it was 16.6%⁴), then in subsequent years the growth will remain at a stable 5-7% level. At the same time, inflation significantly decreased - from 12.3 % in 2009 to 3-3.^{3% at the end of 2011.5}

As for the forecasts of the developers of the strategy until 2016 and the International Monetary Fund (IMF), although they differ from the above data, however, in general, they also indicate the progressive dynamics of the Qatari economy (see Table).

Another direction of the country's development is increased attention to environmental issues. The state supports "green projects" through the Ministry of Environment. All of them are considered with the involvement of specialists from the state oil and gas company "Qatar Petroleum", the Corporation for electricity and Water resources" Kahrama", the state medical institution" Hamad " and some other departments.

A major role in this direction is assigned to large international corporations, which not only actively participate in various innovative developments carried out in educational institutions and research centers of the country, but also finance a number of projects in this area. As an example, we can mention the developments of the companies "Royal Dutch Shell "( on solar panels), " Conoco Philips "(on the latest seawater desalination projects) and "Maersk" (on environmental protection methods).

Local authorities, working under the motto "clean district - healthy life", also pay a lot of attention to environmental protection issues. Thousands of motorized army of cleaners ensures perfect cleanliness on the streets of cities, despite the literally ubiquitous round-the-clock construction.

In our opinion, a powerful state resource and a stable domestic political situation in the country make it possible to predict the success of the 2011-2016 Strategy.

Let's consider the prospects for long-term development of the main sectors of the Qatari economy.

GAS PRODUCTION AND PROCESSING

Qatar's proven natural gas reserves amount to 25.37 trillion cubic meters (14% of the world's total reserves), which puts the country on the 2nd place in this indicator among the members of the Organization of the Petroleum Exporting Countries (OPEC) and on the 3rd place in the world after Russia and Iran.

Most of the gas reserves are concentrated in the territory of the Russian Federation.

Figure 1. Leading LNG exporters in 2010 (million tons, % of world exports).

Source: QNB Capital.

Diagram 2. Main directions of Qatari LNG exports in 2010 (million tons).

Source: QNB Capital.

The Severnoye offshore field, which is essentially a continuation of Iran's South Pars field. Gas reserves are also found in the Dukhan field and other oil fields (Idd al-Sharghi, Meydan Mahzam, Bul Hanan and Al-Ryan).

The Emirati authorities plan to increase the production of "blue fuel". At the end of 2012, according to forecasts of Qatari experts, production will reach 160 billion cubic meters ⁷ (in 2010-116.7 billion cubic meters ⁸).

As a result, the Qataris are planning to increase the production of LNG, which Qatar has been firmly ranked 1st in the world in terms of export volumes for several years (see chart 1).

The country has created technical capabilities to increase the production of liquefied natural gas to 90-95 million tons per year. Doha directly links the future economic success of the country with the intensification of supplies of this particular energy carrier. Fuel is supplied to 23 countries, and sales markets are expanding. Recently, exports to Asia and Europe* have been growing, including the United Kingdom (the leader among all countries that consume Qatari raw materials), Italy, France, and Belgium (see chart 2).

More than a quarter of the liquefied natural gas consumed in the EU comes from Qatar.⁹ Construction of an LNG terminal has begun in Poland, where Katargaz will supply 1 million tons ^of natural gas annually from 2014, with the prospect of further increasing exports. Negotiations are underway to supply Qatari LNG to the Baltic states.

Among the promising long-term sales markets are the countries of North and Latin America. Moreover, the production of shale gas in the United States will not negatively affect the export of Qatari LNG, since the Americans are not yet ready to ensure the functioning of the economy at the expense of their own hydrocarbons and reduce the volume of imports.

Construction of several large gas liquefaction plants has begun in Qatar ¹¹.

The leading role in the country's gas and oil production belongs to the state - owned Qatar Petroleum Company. Two specially established state - owned companies, Katargaz and Rasgaz, export LNG.¹²

Qatar also supplies conventional natural gas. For example, not so long ago, the Emirate became a participant in the Dolphin project**, which allows for the supply of raw materials to the UAE through a gas pipeline passing through-

* It is noteworthy that recently Doha has been actively moving from spot LNG supplies to medium-and long-term contracts with European states.

** The project is being implemented by Dolphin Energy, which is 51% owned by the Abu Dhabi government firm Mubadala Development Company, 24.5% each by Total of France and Occidental Petroleum of the United States.

rez Oman. Trial gas pumping took place back in 2007. The pipeline capacity is expected to reach 90 million cubic meters. m per day ¹³. Kuwait and Bahrain have also shown interest in receiving Qatari gas.

Qatar is developing new technologies for gas processing. For example, the Oryx plant was launched in the country, where, for the first time in the Middle East, gas was converted to a liquid state using catalysts (and not using traditional technology - as a result of cooling).

Qatar's capabilities make it possible to launch another, even more ambitious project - the world's largest Pearl plant, operating on the basis of ultra-modern gas-to-liquid technology (Qatar Petroleum - 51% and Royal Dutch Shell-49%), which was commissioned in 2011. It is expected to reach its design capacity of 140,000 barrels / day of fuel from gas in 2013. In addition, the plant will produce 120,000 barrels / day of oil equivalent of gas condensate liquids and ethane. However, the estimated cost of "Pearl" instead of the originally declared $4 billion. it may increase to $18-19 billion ¹⁴.

OIL AND PETROLEUM PRODUCTS

The emirate has proven oil reserves of about $ 25.4 billion. ¹⁵ bbl, and Qatar ranks 12th in the world ranking by this indicator.¹⁶ The country's largest oil field is Dukhan, whose deposits contain almost 60% of Qatar's "black gold". The remaining part lies in 6 shelf areas. Daily production is about 1.4 million tons. bbl. ¹⁷

At the end of 2011, OPEC decided to increase production quotas (for the first time since 2009), which, according to some experts, can "bring down" oil prices. The Qatari Minister of Energy and Industry M. Al-Sada noted that today the most fair and optimal cost of a barrel, which would not adversely affect the level of production of producers and not "hit" the economies ^of consumers, is $80,18. Speaking at the XX World Petroleum Congress in Doha on ¹⁹, OPEC Secretary General A. Al-Badri called the" convenient price for exporters and importers " $100 per barrel.²⁰ The current price indicators are known to be higher.

In an attempt to contain the rising cost of oil, OPEC announced a new decision on quotas. This, of course, will add turbulence to regional markets, but the global market is unlikely to suffer. The fact is that some members of the organization (in particular, Saudi Arabia*) are very skeptical about the permissible quotas.

As for Qatar, it does not intend to flood the world market with its own oil in the future, but plans to gradually increase supplies to the CIS: from 10 million tons in 2011 to 11 and 12 million tons in 2012 and 2013, respectively.²¹

Qatar's petrochemical industry, which supplies its products to more than 145 countries around the world, will also be developed.²² Since 2010, the Kew-Chem 2 petrochemical plant has been operating in Mesaid, with a capacity of 350 thousand tons of light high-density polyethylene (HDL) and, for the first time in the region, 345 thousand tons of normal alpha-olefins (NAO) per year23. It uses the latest technologies developed by Chevron Phillips Chemical, which owns 49% of the shares; Qatar Petroleum owns 51% of the shares.

In December 2011, Qatar Petroleum (80%) and Royal Dutch Shell (20%) signed a preliminary agreement for the joint construction of a petrochemical complex in Ras Laffan at an estimated cost of $6.4 billion.²⁴ The plant is expected to be put into commercial operation in 2017. It will annually produce 1.5 million tons of monoethylene glycol and 300 thousand tons of NA25, ^the main part of which will be sent to Asian markets.

In addition to these enterprises, the Qatari government, with the assistance of foreign firms, intends to build several more oil refining complexes. It is planned to increase the production of petrochemical products from 9.2 million tons in 2011 to 23 million tons. t in 2020 $²⁵ billion will be allocated for this purpose26.

Given the desire of Qatar to expand this area, as well as the large financial opportunities at its disposal, it can be expected that Doha will find new markets for the sale of these products.

700 LARGE CONSTRUCTION SITES

Infrastructure remains the main theme of Qatar's investment programs. Approximately 50% of the projects implemented and listed in the

* There are rumors that the cartel's decision was lobbied by Riyadh in many ways to put pressure on Russia. In our opinion, this is not true, since many OPEC members (especially Libya, Algeria, Iraq, and Iran) are more interested in building up their own "energy muscles" after a temporary downturn, rather than in weakening Russia's.

In the tender lists of construction projects, as of the beginning of the second quarter of 2011, they were classified as infrastructure projects.²⁷

Over the past few years, the country has been experiencing a "construction boom". The goal is to change the very image of Doha. A large-scale reconstruction of the road network has also been launched. A road link is being built in the Al-Gharaffa area, which will provide convenient access to Doha from the northern cities of the emirate. This is a three-level overpass with three lanes of ground traffic in each direction with a length of 900 m, as well as three lanes of underground traffic of the same length.

The largest and most ambitious construction project is the construction of the satellite city of Doha Lusaila, which will cover an area of about 38 square km28. Lusail will stretch along the Gulf coast for ²⁸ km. For comparison purposes: this is seven times longer than the coastline of Monaco. About 190 thousand people will be able to live permanently in the new satellite city.

In addition, Lusail will be ready to accommodate 170 thousand temporary visitors (for example, construction workers from abroad) and annually about 90 thousand tourists and other visitors to entertainment centers and various recreation areas.

In Lusail, the" city of the future", as the Qataris call it, it is planned to lay a 30-kilometer highway, a light metro with a length of 22 km (4 branches, 34 stations, including 7 underground), which will connect the districts of Lusail and the city itself with Doha International Airport. Residents will also benefit from a water taxi service.

A total of 17 different districts are planned to be built in Lusail. The total cost of the project is estimated at approximately $7.4 billion.²⁹

Most of the satellite city's buildings and structures will consist of monolithic reinforced concrete structures based on steel frames. In this regard, it was decided to accelerate the development of the metallurgical industry. In accordance with the five - year plan, the country's steel production will more than triple in just three years-from 2012 to 2014 and grow from the current 700 thousand to 2.5 million tons per year.

Much remains to be done for the development of cement production, which is also not enough to implement such ambitious construction plans. After all, about 700 large-scale facilities are being built in the country at the same time.

The Qatar construction complex is a mechanism that performs a large amount of complex work, taking into account achievements ranging from the degree of protection of the ecosphere to the creativity of engineering in the field of construction, which fully corresponds to the tasks set by the economic strategy for long-term national development.

¹ Official text - http://www2.gsdp.gov.qa/wwwl_docs/ NDS_EN. pdf

² Hereafter, data is based on the 2011-2016 Strategy.

³ Qatar - Economic Insight, September 2011.

⁴ CIA World Factbook 2012 - http://www.cia.gov/library/ publications/the-world-factbook/geos/qa.html

⁵ Ibidem.

⁶ Ibid.

⁷ Calculations were made by the author based on data from Qatar-Economic Insight, September 2011.

⁸ CIA World Factbook 2012...

⁹ Liquefied Natural Gas Market in Europe. RREEF Research, February 2011 - http://www.rreef.com/content/_media/Research_ Liquified_Natural_Gas_Market_in_Europe_Februar_2011.pdf

¹⁰ Emir's Poland visit will cement ties: Envoy // The Peninsula, 14.10.2011.

¹¹ Qatar Petroleum (70%) and Exxon Mobil (30%) opened the Rasgaz 6&7 plant, which consists of two equivalent liquefaction units with a total capacity of 15.6 million tons per year. With the participation of Qatar Petroleum (68.5%), Konoko Philips (30%) and Mitsui (1.5%), the Katargaz III plant with a capacity of 7.8 million tons per year was launched. Qatar Petroleum (70%) and Royal Dutch Shell (30%) launched the Katargaz IV plant of the same capacity.

¹² Katargaz was founded in 1984 and is a joint venture between Qatar Petroleum (65%), Total (10%), Exxon Mobil (10%), Mitsui (7.5%) and Marubeni (7.5%) (both companies). japanese). Rasgaz was established in 2001 by Qatar Petroleum (63%), Exxon Mobil (25%), Korea Gas Corporation (5%), Itoyu Corporation (4%) and Nisho Iva"(3%) (both Japanese).

¹³ On the assurance of the deputy. General Director of the Qatar branch of Dolphin Energy I. Al-Qawari during a conversation with the author in 2011.

¹⁴ Pearl GTL - an Overview - http://www.shell.com/home/content/ aboutshell/our_strategy/niajor_projects_2/pearl/overview/

¹⁵ CIA World Factbook 2012...

¹⁶ Ibidem.

¹⁷ Ibid.

¹⁸ Qatar plans huge LNG investment // Gulf Times, 21.03.2011.

¹⁹ This large-scale and prestigious congress of specialists is held every 3 years, and in December 2011 it was held in a Middle Eastern country for the first time in its almost 80-year history. The congress was attended by about 50 heads of industry ministries and departments from different countries of the world, more than 600 heads of major companies, including Russia's Gazprom, Rosneft, Tatneft, THK-BP, Bashneft and Surgutneftegaz. In 2014, the event will be held in Moscow.

²⁰ OPEC: Speculators are Driving Up Oil Prices // ThirdAge.com, 8.12.2011 - http://www.thirdage.com/news/opec-speculators-are-dri-ving-up-oil-prices_12 - 08 - 2011

²¹ Qatar eyes export of 11m tonnes of LPG in 2012 // ArabianBusiness.com, 22.11.2011 - http://www.arabianbusiness.com/ qatar-eyes-export-of-11 m-tonnes-of-lpg-in-2012 - 431264.html

²² Qapco opens its new representative office in South Africa. Press release, 22.01.2012 - http://www.industriesqatar.com.qa/IQ/IQ.nsf/0/ 8bab75fe90e01f7b4325798e001f3d55/$FILE/QAPCO%20PR%2022011 2%20Eng.pdf

²³ http://www.conocophillips.com/EN/about/worldwide_ops/che micals/Pages/KeyProjects.aspx

²⁴ Qatar, Shell lay out plans for petrochemical plant // R&D, 4.12.2011 - http://www.rdmag.com/News/FeedsAP/2011/12/energy-qatar-shell-lay-out-plans-for- petrochemical-plant/

²⁵ Ibidem.

²⁶ Qatar to spend $25 bn on petchem growth by 2020 // Arab News.com, 31.01.2012 - http://arabnews.com/economy/article569081. ece

²⁷ From the author's conversation with M. Thomson, Communications and Customer Service Advisor at Ashgal in March 2011.

²⁸ http://www.lusail.com/English/The-City/Master-Plan/Pages/ Master-Plan.aspx

²⁹ Work begins on first Lusail City Marina in Qatar // ConstructionWeekOnline.Com, 13.10.2010 - http://www.construction-weekonline.com/article-9781-work-begins-on-first-lusail-cit y-marina-in-qatar/

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