C O N F I D E N T I A L DOHA 000686

SIPDIS

E.O. 12958: DECL: 09/24/2018
TAGS: ENRG EPET EINV ECON QA
SUBJECT: ENERGY MINISTER: GAS MORATORIUM TO REMAIN IN PLACE

Classified By: Amb. Joseph LeBaron, reasons 1.4 (b) and (d).


1. (C) During an introductory meeting with Ambassador
September 22, Deputy Prime Minister and Minister of Energy
and Industry Abdullah Al-Attiyah indicated that Qatar is
likely to keep its moratorium on further North Field
development in place past the official deadline of 2011.


2. (C) Describing the rapid pace of development over the past
decade, Al-Attiyah noted that "we want to be careful and slow
things down." Qatar expects to increase its current
production of 38 million tons per annum (mta) of gas to 77
mta within the next four years, and Al-Attiyah reported that
all of this future capacity is already sold via long-term
contracts.


3. (C) "We know when enough is enough," he stated. Noting
with a grin that all of the contracts are "take or pay," he
said Qatar would get its money even if a global economic
slowdown reduces energy demand. Further, Al-Attiyah believes
China, India, and other Gulf countries (particularly Kuwait
and the UAE) would easily absorb any excess gas, as they are
in desperate need of power generation capacity and want to
reduce their emissions by using gas-fired plants.

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COMMENTS
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4. (C) Several energy sector contacts have speculated in
recent months that Qatar might extend or make permanent the
current North Field moratorium. Qatar is already the global
leader in liquefied natural gas production and once the
current mega-train build out is finished, Qatar will produce
the equivalent of about 5 million barrels per day of oil
(including current oil production of about 850,000 bpd), an
astounding sum for a country of at most 1.7 million
Residents, with only 225,000 native Qataris.


5. (C) Although the original reason for the moratorium was
reportedly to assess reservoir stability and the technical
risk of rapid development, Al-Attiyah's most recent comments
indicate that the moratorium is also useful as a way of
checking the country's incredible revenue growth. Qatar
already seems to have more money than it knows what to do
with, and a strategic development stoppage makes sense -
hopefully allowing Qatar to focus on managing well its
revenue stream.


6. (C) Likely to be disappointed are the energy majors, such
as Chevron and BP, who have set up shop in Doha simply to
position themselves for a piece of future gas development.

LeBaron