Falling oil price pushes down Qatar revenues

It is clear that 2015 will go down as a year of financial change for Qatar. The falling oil price has pushed down the revenues Doha receives from its long-term liquefied natural gas (LNG) agreements, reducing that income by an estimated $16bn this year and playing a part in forcing a rethink on how the country moves ahead with some projects. It has already taken the decision to cancel two major petrochemicals plants and a major water scheme since the oil price began to fall last year. LNG has bankrolled the Gulf state, allowing it to push ahead with world-class infrastructure schemes, become a force in the sporting world, and enrich its people financially. Much of its infrastructure spending is either directly or indirectly linked to the 2022 Fifa football World Cup and so looks safe, although even here there is a changing attitude towards funding. Public-private partnership agreements are under serious consideration, indicating the government wants funding from the private sector to alleviate the financial drain from developing so much infrastructure in (on the scale of a country’s typical evolution) only a few years. Last year, Qatar was responsible for roughly one-third of the world’s 240 million tons of LNG production. However, countries elsewhere in the world are developing LNG plants with a combined capacity of 145 million tons a year. The changing LNG outlook means Qatar faces the prospect of lower revenues and tougher competition when its long-term agreements begin coming up for renegotiation from 2021.