By Pratap John
Chief Business Reporter
Weaker global demand has seen Qatar’s oil production falling to about 674,000 bpd in January, new data shows.
But, according to QNB, “redevelopment plans” should “stabilise” output going forward.
Qatar Petroleum (QP) is implementing a redevelopment programme to “steady production” at its oil fields.
This “heavy investment” in maturing oil fields should “limit further declines” in oil production, QNB said in its ‘Monthly monitor’. Qatar oil prices fell in January owing to weaker global demand, it said.
The stagnant eurozone economy, recession in Japan and slowdown in emerging markets, especially China, are contributing to the weakness in hydrocarbon demand and an oil supply glut, which is putting downward pressure on international oil prices.
Earlier in its ‘Qatar Economic Insight 2015’ QNB said the Barzan project is expected to drive growth in the hydrocarbon sector, which may grow by 0.8% in 2015, 1.8% in 2016 and 1.9% in 2017 despite declining oil production due to maturing oil fields.
Lower hydrocarbon revenue and rising capital spending are expected to tip the fiscal balance into deficits of 2.2% of GDP in 2015, 3.4% in 2016 and 3.7% in 2017.
Hydrocarbon revenue is expected to decline with lower oil prices and crude oil production, but this will be partly offset by higher non-hydrocarbon revenue, supported by better corporate tax collection.
The ‘Monthly monitor’ said Qatar’s international reserves fell slightly to $41.1bn at end-January 2015. This compares to $41.9bn at end-January 2014. Despite the slight fall, the import cover remains more than adequate at 7.5 months of prospective imports at end-January 2015, well above the IMF-recommended level of three months for pegged exchange rates.
More broadly, Qatar’s international reserves have been steadily rising over the years on large current account surpluses.
Going forward, QNB expects international reserves to remain broadly stable at eight months of prospective import cover over the medium term, notwithstanding the lower trade surplus.
Qatar’s foreign merchandise trade balance registered a surplus of QR18.5bn in January 2015, down from QR35.8bn in January 2014.
This, QNB said, was mainly a result of lower international crude oil prices.
Total exports fell by 36.7% year-on-year. At the same time, QNB said, imports rose robustly (10.2% year-on-year), reflecting the growing population and large investment spending
Business / Business
Qatar oil production drops to 674,000 bpd in January on weaker global demand: QNB
