Energy Tribune
October 2006

Saudi Arabia, Kuwait, Venezuela, and Iran are key members of OPEC. But over the next few years, they are going to have to make way for Qatar, the smallest member of the cartel. By 2011, if all of the currently planned gas-to-liquids and LNG projects are completed, the tiny country - with just 885,000 citizens - will be the richest country on earth in terms of per capita GDP. It will also be among the most important for the U.S., both in terms of energy supply and military presence in the Persian Gulf.

Qatar's finance minister, Yousuf Kamal, recently said Qatar's GDP will almost double by 2011, to some $60 billion. If that happens, then each of the country's residents will have GDP output of some $67,796. Today, the richest country in the world is Luxembourg, with a per capita GDP of $66,463. (At present, Qatar's GDP per capita ranks it 26th among the world's nations. The only OPEC member that currently ranks higher is the UAE, at number 21.)

The meteoric rise of Qatar among the world's wealthiest nations is, of course, a reflection of its vast hydrocarbon deposits. Now producing about 1.7 million barrels of oil equivalent per day, its output is expected to surge to almost 6 million boed by 2011. And the biggest slice of that new production will be in the form of natural gas from the North field, which by itself contains 900 trillion cubic feet of gas. That's an astounding amount of natural gas - some 14 percent of the world's total known gas reserves. Production from the North field is feeding the world's largest concentration of gas liquefaction plants. Qatar currently has about 14 percent of the world's total LNG production capacityis expected to triple, to about 77 million tons per year. And according to a recent analysis by Robert Kessler of Simmons & Company International, by 2015 Qatar will have about one-fourth of the world's LNG production capacity.

The North field is also feeding massive growth in the gas-to-liquids business. Four GTL projects with total investment of some $33 billion are now underway in Qatar. By 2012, the country should be producing about 400,000 barrels of GTL fuel per day.

While Qatar is growing ever richer, it's also a political wild card. The country is one of the United Nations' most stridently anti-Israel members. Since Israel's July invasion and bombardment of Lebanon, the emir of Qatar, Hamad bin Khalifa al-Thani (who staged a coup in 1995 to supplant the previous emir, his father) has gone out of his way to state his support for Hezbollah, the Shia group that controls much of southern Lebanon. This stance has angered Kuwait and Saudi Arabia, who see Hezbollah, which is backed by Iran, as a destabilizing force.

Emir Hamad's actions should also concern the U.S. military, which heavily depends on Al Udeid Air Base in Qatar. The U.S. Central Command, the arm of the U.S. military that oversees operations in the Persian Gulf, is building a major operations center at Al Udeid. Since 2002, when the U.S. was forced to vacate Prince Sultan Air Base in Saudi Arabia, the base in Qatar has been CENTCOM's operations hub in the region.

Qatar is the only Arab member of the United Nations Security Council. It is also home to Al Jazeera, the global TV station and news outlet that the Bush administration for broadcasting tapes released by Osama bin Laden and other al-Qaeda officials.

For the U.S. military and the international oil companies now investing in Qatar, the long-term questions are: how long will Emir Hamad stay in power? And can he avoid the same type of coup that ended his father's career? America's future in the region and tens of billions of dollars are riding on those two questions.

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