Identifier
Created
Classification
Origin
06DOHA5
2006-01-02 09:30:00
CONFIDENTIAL
Embassy Doha
Cable title:  

SCENESETTER - VISIT OF ASSISTANT SECRETARY ANTHONY

Tags:  ECON EPET EFIN KTFN QA 
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C O N F I D E N T I A L SECTION 01 OF 03 DOHA 000005 

SIPDIS

FOR RIYADH: PLEASE PASS TO A/S WAYNE

E.O. 12958: DECL: 01/01/2016
TAGS: ECON EPET EFIN KTFN QA
SUBJECT: SCENESETTER - VISIT OF ASSISTANT SECRETARY ANTHONY
WAYNE TO QATAR

Classified By: Classified By: CDA Scott McGehee for reasons 1.4 (b) and
(d).

C O N F I D E N T I A L SECTION 01 OF 03 DOHA 000005

SIPDIS

FOR RIYADH: PLEASE PASS TO A/S WAYNE

E.O. 12958: DECL: 01/01/2016
TAGS: ECON EPET EFIN KTFN QA
SUBJECT: SCENESETTER - VISIT OF ASSISTANT SECRETARY ANTHONY
WAYNE TO QATAR

Classified By: Classified By: CDA Scott McGehee for reasons 1.4 (b) and
(d).


1. (C) Embassy Doha is pleased to welcome you back to Doha.
We expect that you will find the Qatari leadership open and
responsive to the proposed Strategic Investment Initiative
(SII) for several reasons. Our goals for regional democratic
reform largely coincide with those of Qatar. Also, the Qatari
leadership is drawn to roles that enhance its international
prestige, and will likely view working with the U.S. on the
SII with that optic and with its new seat on the UN Security
Council in mind. Additionally, your visit comes at a time
when Qatar and the U.S. appear to be seeking opportunities to
get beyond the diplomatic estrangement over Al-Jazeera that
has dogged our bilateral relations in recent years. Other
important areas also stand to be bolstered by your visit:
further cementing our energy relationship, helping support
U.S. businesses, and advancing our cooperation on
interdiction of terrorist financing.


2. (C) We have requested meetings with Second Deputy Prime
Minister and Minister of Energy and Industry Abdallah bin
Hamad Al-Attiyah, the Minister of State for Foreign Affairs
Ahmed Abdallah Al-Mahmoud (the Foreign Minister will be out
of the country),Minister of Finance Jousef Hussain Kamal,
Minister of Economy and Commerce Sheikh Mohammed bin Ahmed
Al-Thani, and Central Bank Governor Abdullah bin Khalid
Al-Attiyah.


3. (U) The paragraphs that follow provide background on key
current economic issues in Qatar.

4.(C) Qatar has begun to use its wealth more intensively for
development and reconstruction purposes while seeking
leadership roles for itself. One recent example is that
establishment of the "Reach Out to Asia" foundation, headed
by the Amir,s daughter, Sheikha Miyassa. The importance of
the foundation is part of the leadership,s looking forward
to the December 2006 Asian Games, which Qatar will host.

5.(C) While the foundation's activities face east, Qatar has
contributed as expected to reconstruction and development in
Iraq and the Palestinian Territories. In Iraq, it sought a

leadership position with the establishment of a $15 million
higher education fund through UNESCO and has pledged $100
million at Madrid. Nevertheless, Qatari has not been
proactive in pursuing reconstruction efforts. This may be due
in part to U.S. pressure over Al Jazeera and to the
perception that Qatar is already doing its share by hosting
U.S. forces here.

6.(C) In the Palestinian Territories, Qatar makes use of
personal contacts when setting up bilateral programs. For
example, Qatar built a soccer stadium for an Arab team in
Israel and is donating 100 vehicles for the Palestinian
police. The Amir has close relations with Mahmoud Abbas, who
will visit Doha January 2 and 3.


7. (C) Over the past year, Qatari officials have maintained a
behind-the-scenes dialogue with their Syrian and Lebanese
counterparts in an attempt to bring about stable
disengagement and to defuse tensions with the United States.
Qatari officials may have concerns about how their
participation in the SII might play out in their relations
with Syria.


8. (C) In the Arab region Qatar has generally demonstrated a
degree of independence and a desire to work quietly at the
highest levels. The SII would institutionalize and make more
transparent some aspects of regional policy. The GOQ will
have to take this on board. Such an approach may complement
their position on the UN Security Council. Qataris will also
want to protect their role from being overshadowed by their
large neighbors, the Saudis.

--------------
Terrorism Finance
--------------


9. (U) Qatari security services have an adequate legal
structure in place to pursue terrorists. In March 2004, Qatar
passed the Combating Terrorism Law. The law defines terrorism
and terrorist acts, lists specific punishments for terrorist
crimes to include the death penalty, provides measures
against terrorist financing or fundraising activities, and
gives the government authority to take action against
terrorist crimes and activities. The law incorporates
existing laws such as Qatar's penal code, criminal procedure
code, judicial law, a law on weapons, ammunitions and
explosives, and an anti-money laundering law.


10. (U) The Qatar Authority for Charitable Works, which
monitors all domestic and international charitable
activities, increased its resources and capabilities during

2005. The Secretary General of the Authority approves
international fund transfers by the charities. The Authority
has primary responsibility for monitoring overseas
charitable, developmental, and humanitarian projects, and
reports annually to Government ministries on the status of
all projects. The Authority is developing measures to exert
further control over domestic charity collection.


11. (U) Qatar continues to develop its financial intelligence
unit (FIU). The FIU is responsible for reviewing all
financial transaction reports, identifying suspicious
transactions and financial activities of concern, and for
ensuring that all Government ministries and agencies have
procedures and standards to ensure proper oversight of
financial transactions.

--------------
Energy Sector
--------------


12. (U) Qatar's economy is one of the fastest-growing in the
world, achieving a 20.5% increase in GDP in 2004 and is
expected to record equal or better growth for 2005. Per
capita income is nearing $38,000, exceeding that of the U.S.
and soon to be the highest in the world. Qatar's vast wealth
has resulted from the successful development of its natural
gas resources over the past 10 years with plans for even
greater expansion over the next decade. Under the leadership
of the Minister of Energy and Industry, Qatar Petroleum is
maximizing use of Qatar's natural resources to diversify the
economy and provide business and employment opportunities to
Qataris. Since 1999, there has been $60 billion in foreign
investment in Qatar's energy sector, about $40 billion of it
coming from U.S. companies. Qatar plans to invest $70 billion
in the natural gas sector over the next seven years.


13. (U) The GOQ estimates Qatar's oil reserves are at 27
billion barrels. Qatar's daily average production is
currently estimated to be 806,000 barrels per day; at current
production rates, oil reserves are expected to last 20 to 40
years. Qatar's goal is to increase overall production
capacity to over one million bpd by 2006. Occidental and
Anadarko are the two U.S. companies operating in this sector.

--------------
Oil Production
--------------


14. (U) Foreign oil operators in Qatar include Maersk Oil
(Norway) in Al-Shaheen at 300,000 bpd; Occidental Petroleum
in Idd Al-Shargui North and South Domes with a combined
100,000 bpd (90,000 in the North Dome and 10,000 in the South
Dome); TotalFinaElf (France) in Al-Kahleej with 30,000 bpd;
and, Anadarko (USA) Al-Rayyan with 15,000 bpd. Qatar's oil
exports target primarily the Asian market: Japan 71.5%,
Thailand 8%, South Korea 8%, Singapore 5.5%, China 3.5% and
other countries 3.5%.

--------------
Natural Gas Production
--------------


15. (U) The majority of Qatar's current development in the
energy sector is focused on its natural gas reserves.
Discovered in 1971, Qatar's North Field contains 15.3% of
world natural gas reserves, third behind Russia and Iran.
Estimated at 900 trillion cubic feet (tcf),the North Field
is the largest non-associated gas field in the world. The
North Field extends over an area of approximately 6,000
square kilometers is expected to support planned production
for over 200 years.


16. (U) QP manages the natural gas sector through its two
major joint ventures, Qatargas and RasGas. The GOQ's primary
goal is to supply 78 million tons of LNG annually to the
international market by 2012 in order to meet about 30% of
the global energy needs for LNG. GOQ officials have said that
QP would increase its LNG output from 15.1 million tons per
annum (mtpa) in 2003 to 20.2 mtpa by the end of 2004. In
October 2004, Minister al-Attiyah said that Qatar plans to
invest $70 billion in the natural gas sector over the next
seven years. The production facilities for Qatargas, Rasgas
and other natural gas related projects are located at Ras
Laffan Industrial City.

--------------
Al-Khaleej Gas Pipeline Project
--------------


17. (C) A Memorandum of Understanding was signed between QP,
ExxonMobil and Kuwait Petroleum Corporation (KPC) in July
2000 to develop a project to transport natural gas from Qatar
to Kuwait. The execution of this project awaits the approval
of the Kingdom of Saudi Arabia to allow part of the pipeline
to go through Saudi territorial waters. The GOQ wants the
U.S. to convince the Saudis to agree to an easement for the
pipeline. The Saudis do not appear willing to budge, leaving
Kuwait in a position to look to Iran to provide additional
gas supplies.

--------------
Trade Issues
--------------


18. (U) Qatar signed a Trade and Investment Framework
agreement with the U.S. in March 2004 but progress toward a
Free Trade Agreement is moving slowly at best. The Minister
of Economy and Commerce has expressed his commitment to
achieving a FTA, but doing so will require Qatar to remove
such trade obstacles as mandatory majority Qatari ownership
of most businesses, the government telecom monopoly,
restrictions to foreign investment in the financial services
sector, labor issues, and transparency in government
procurement.

--------------
Political Reform
--------------


19. (U) Qatar's own program of reform, launched by the Amir
after he assumed power in 1995, took a significant step
forward last June when its first constitution came into
force. The constitution calls for a two-thirds elected
national legislature. These elections have not been scheduled
but are expected to take place sometime in early 2007. Qatari
women will have the right to vote and will be encouraged by
the government to run for office. In municipal elections in
1999 and 2003, women here were the first in the Gulf region
to cast votes, and one woman was elected to the council.

--------------
Dramatic Changes in Education
--------------


20. (U) Education reform, headed by the Amir's wife, Sheikha
Mozah, is a becoming a showcase. This reform includes a
sweeping revamp of Qatar's pre-university and higher
education system based on Rand Corporation recommendations.
Also as part of this effort, Qatar has brought to its
"Education City" the branch campuses of Texas A&M University,
Virginia Commonwealth University, Carnegie-Mellon, and the
Weill-Cornell Medical College. In May, Georgetown University
signed an agreement with Sheikha Mozah's Qatar Foundation to
open a branch campus here in September. These have been
ground-breaking efforts that have been hailed by many as
models for other states in the region.

--------------
Al-Jazeera
--------------


21. (C) Al-Jazeera remains a blight on our robust
cooperation. In response to our repeated protests and
appeals, Al-Jazeera's management claims to have reduced the
air time given to Al-Qaida and kidnappers' videos, and have
made efforts to address the inflammatory nature of its
reporting from Iraq. The channel has highlighted to us its
coverage of pro-democracy movements in Lebanon and Egypt as
well as broader coverage of Middle Eastern politics. Al
Jazeera Managing Director told the Ambassador, "If the
Americans want to find a proper partner in its effort to get
democracy and reform, they won't find a better one than Al
Jazeera."


22. (C) During the Ambassador's May 2005 visit to Washington,
the consensus of opinion among USG agencies monitoring
Al-Jazeera is that the station has shown some signs of
improved broadcasting but still remains unacceptably sloppy
in its journalist practices and in its anti-American
editorial bent. The Al-Jazeera issue has cast a long shadow,
affecting cooperation on a variety of bilateral initiatives
floated by the U.S. The GOQ wants to find ways to put
U.S.-Qatar relations on a stronger, more positive foundation.
We anticipate that your Qatari interlocutors will welcome
your visit and the SII as a chance to move toward that
objective.
MCGEHEE