BUSINESS DIVERSIFICATION OF QATAR

Business Diversification of Qatar

Business Diversification of Qatar

Abstract

This report elaborates the economy of Qatar with respect to its diversification and the entry of Qatar in new markets like Asset Management and Insurance Industry. Also, it enlightens the key points of the Qatar's economy and businesses, including the reliance of Qatar on Oil and Gas reserves.

Introduction

The region of Southwest Asia and North Africa is commonly known as Middle East. Although only small parts of the region are suitable for farming, much of the population works in agriculture. Some crops are grown for export, but many foods must be imported. The region holds much of the world's oil and natural gas reserves. Countries rich in these resources have developed industries that boost their economies.

The presence of vast oil reserves has also placed Southwest Asia and North Africa in a key position with respect to the world's economy. Western world is mostly dependent on this region. Although the USA and Russia are the top ranked producers, but followed by Saudi Arabia.

Some Facts about the Region

About 65% of world reserves

share increased from 61% (1965) to 65% (1999)

Persian Gulf, Iran, Turkey, Iraq, Kuwait, Saudi Arabia, UAE, Qatar, and Oman are the nations that have reserves of both oil and gas

In North Africa, Algeria, Tunisia, Libya, and Egypt are top producers (Coleman, 2006).

Geography of Oil reserves, top five countries

Qatar 622.97 million cubic feet per person

Iran 11.89 million cubic feet per person

Oman 10.43 million cubic feet per person

Saudi Arabia 9.03 million cubic feet per person

Bahrain 4.79 million cubic feet per person (Coleman, 2006).

Geography of Gas reserves, top five countries

Iran 812 trillion cubic feet (1/1/03E)

Qatar 509 trillion cubic feet (1/1/02E)

Saudi Arabia 219.5 trillion cubic feet (includes half of NZ) (1/1/02E)

Iraq 109.8 trillion cubic feet (1/1/03E)

Oman 29.3 trillion cubic feet (1/1/02E) (Coleman, 2006).

Economy of Qatar

It is gas reserves that dominate the Qatar's wealth of natural resources. However, Qatar is clearly not resting on its laurels in the way that Kuwait is. True, while every other country is focused on diversification away from the hydrocarbon sector, in the short-term Qatar will become more concentrated on gas sales. However, this will only hide the fact that the government is making good progress on helping to nurture a stronger private sector.

In the short-term, the focus is going to be on the development of the country's hydrocarbon sector. This strategy has three thrusts. The first is to expand its sustainable level of oil production to 875 kbpd by the end of this year, up from actual production levels of 777 kbpd in Q2 2005 - good news for Asia as the majority of the country's oil is exported to Japan with Singapore, South Korea, Thailand and India also major importers of Qatari oil.

However, this is small fry compared to its plans for the gas sector. Qatar has the world's second largest proven gas reserves after Iran. There are two liquefied natural gas (LNG) projects; Qatar gas and Ras Gas and Qatar Petroleum, ...