Qatar is strategically placed to increase its presence in European energy markets, says the Lord Mayor of the City of London, Alderman Fiona Woolf.
By Denise Marray/Gulf Times Correspondent /London
The UK’s much anticipated issue of a £200mn Islamic bond, or sukuk, is likely to attract interest from both Muslim and non-Muslim investors, according to the Lord Mayor of the City of London, Alderman Fiona Woolf.
Speaking to the Gulf Times at her office in the heart of the City, she said: “People tend to think that Islamic finance is of interest to the Muslim world. But I think it is of interest to the non-Muslim world as well. It is based on a responsible, ethical investment mindset and there is a lot of appetite for that.”
Over the last month, Woolf spoke at two of the many meetings convened by Baroness Warsi, who established and co-chaired the UK government’s first Ministerial Task Force on Islamic Finance, to ‘think through the next steps’ in connection with the sterling sovereign issue scheduled for September for which HSBC and Linklaters have the mandate.
She said, “The government is very much behind helping to promote Islamic finance. As sukuks are asset-based they are a very useful tool for infrastructure and property financing.”
Speaking of the role of London she said: “It is to London that people come to raise capital, knowing that it is a huge financial supermarket where there are lots of products and services and lots of deep pools of liquidity where people can do their shopping for finance.”
Asked about Qatar’s importance to the UK in terms of energy supply and security, Woolf said: “Qatar is a very steady provider to us and we would be lost without them. They supply significant supplies to us and I think Qatar is strategically placed to increase its presence in European markets. It’s probably all a question of price and what is available, as gas is traded in competitive wholesale markets.”
She said the completion of a single market within Europe for both electricity and gas would facilitate cross border trade. “We’ve been trying to create a single market within Europe in energy since the early 1990s. It is helpful because it creates a bigger market and competition drives efficiency and puts a downward pressure on prices. It also helps with security of supply if we can import across an interconnector or through a gas pipeline. The flexibility and competitiveness that the single market would create would I think be good for Europe as a whole.”
Woolf believes that it is important to think strategically as to what ‘the changing face of an energy policy for the whole or Europe’ would look like if, for example gas supplies from Russia were to become ‘more difficult’ in terms of quantity or price.
Diversity is the key word she uses to describe the kind of energy provision ideal for the UK. “I think that we would be doing our children and grandchildren a favour if we invested in all those technologies that look as if they have some potential for scalability and reliability to see which turn out to be the most successful,” she said.
She noted that there was a consensus among leading scientists, such as Sir Mark Walport (government chief scientific advisor) and Sir David King (special representative for climate change) that there is a need for “some base load nuclear plant if only to keep the lights on”.
Woolf added that there are clean coal technologies related to carbon capture and storage that are worth developing. “We still have a lot of coal, and fossil fuels are still prolific and we know how to extract them. If we could deal with the carbon content that would be helpful.”
With regard shale gas extraction in the UK, Woolf observed that the potential is as yet unknown: “We have to do the geological work and we have to work out what the costs will be. I don’t know what our extraction costs would be so I can’t give an informed opinion on the potential for shale gas here,” she said.
She said the scale of the US made it a very different prospect when it comes to shale extraction and noted that UK landowners don’t own the minerals and therefore lack incentive to have fracking on their land.
As for the North Sea reserves, Woolf was asked if in the event of Scotland choosing to become an independent country, who would own the oil. This, she said, would depend on where the ‘dividing line’ between the rest of the UK and Scotland is situated. In the event of the oil being deemed to belong to Scotland this, she said, it would mean that, “Scotland would become another player in the world market and we would be buying our oil and gas from them and comparing the prices with those of Qatar.”
Speaking of the UK’s relations with Qatar, Woolf said there were important connections through both commerce and education. She noted that Qatar “has invested a lot in its human capital” and that there are strong links with the UK in terms of the provision of education, training and qualifications.
She added: “One of the things we like and respect about the Qataris is that they are very entrepreneurial, innovative and ‘good at seizing the day’. That’s why the bilateral trade and investment agenda is so dynamic and strong between us. It goes in both directions. We are very blessed to have so much Qatari investment in London. Some of it is very iconic, but lots of it is creating jobs and growth here.”
She hoped to see more private sector businesses setting up in Qatar “to create jobs for young Qataris because there is a lot of talent there.” She said that there was great potential for the UK and Qatar to pool their skills in developing energy and infrastructure projects in Africa.
Woolf first visited Qatar in the 1980s and has watched the incredible transformation of the country. “It’s so vibrant – it’s not just the buildings but the energy and the ‘get up and go’ and the international focus of the Qataris who are players on the world stage,” she said.
