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Qatar Country in Relation with OPEC Essay

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Updated: May 30th, 2020


This paper has presented seven historical events that integrated the State of Qatar upon a strong relationship with OPEC. The events covered the exploration for natural resources, oil discovery of Qatar, first exportation of oil, establishment of OPEC, increasing investment for oil development, independence, and development of oil resources, post independence development and all the contribution to the national and global oil industry.

Exploration for Natural Resources

In 1935, the Sheikh of Qatar came into an agreement with the English-Persian Corporation and formed Qatar Oil Associated Corporation to manage and administer geological survey to find mineral resources especially oil resources, according to the terms of agreement the British company was entitled to conduct oil exploration for at least 75 years from the date signing. The drive for natural resources exploration was hampered at the initial stage due to the border conflict with the neighbouring countries Saudi Arabia, Bahrain, the negotiation to mitigate border conflict takes three years and the implication of oil, and gas exploration program came into execution in 1938 (Humphreys 3; Ibrahim and Harrigan 18).

Oil Discovery of Qatar

Under the British colonial rule in 1940, the first oil field ‘Dukhan’ of Qatar was discovered in the west coast of the peninsula that produced 5000 barrels of crude oil per day from around six thousand depth of ground and a stable production continues, but the catastrophes of World War II hampered its production until 1946 (ESQ 1). The discovery of oil resources turned the life-style of the people of Qatar in a higher by creating huge job opportunity in the state and it has evidenced that 66% of the total workforces of Qatar engaged to serve oil industry with sustainable wage and job satisfaction that enhanced the national economic growth (Crude Oil Peak 1).

First Exportation of Oil

Meeting the domestic requirement of oil in 1949, Qatar decided to enter in the export market, the first importing country was India, and the export quantity was eighty thousand metric tons shipped through President Liner and the export remittance received by Qatar was 5.9 million Indian rupees, the successful transaction inspired the country to increase its oil production. The oil production rose at 46,500 barrels per day in 1951 and 67,700 barrels per day in 1952, the huge production explored its exports in different countries that placed the county at the eleventh place among the oil exporting countries with a GDP contribution of US$ 12 million from the oil exports remittance (ESQ 1).

Establishment of OPEC

Five Oil exporting countries (Iran, Iraq, KSA, Kuwait, and Venezuela) united in the Baghdad conference in 1960 and formed OPEC with the aim to harmonize their petroleum production policies that would safeguard the fair and stable oil prices for the producers and to rescue the oil industries from any market manipulation that can ensure a smooth growth of the nations. Qatar joined in the OPEC in 1961 with the aim to unite with the collective vision of the organization that uphold the absolute right of all the member nations to apply enduring sovereignty over their own natural resources with the greater attention to the national economic growth (OPEC 1; Qatar Petroleum 2; Ahmadov 1).

Increasing Investment for Oil Development

The authority of Qatar taken action for further investment to explore oil in the water resources of the country by coming into agreement with the Dutch oil company ‘Shell’ in 1952 that come into offshore production in 1963 by discovering the largest oil reservoir at Abu Al-Hanine oil field and resulted 233,000 barrels of per day production with increasing export. During 1970, the Shell left large area of their leased area and the government welcomed Japanese company to establish another new plant for further onshore oil production, the border resettlement with the Emirate provided smooth environment to explore more oil resources with increasing contribution to the GDP (IMF 5; QSA 8; Klinger and Lederman 11).

Independence and Development of Oil Resources

Qatar gained its independence in 1971 that provide the government exclusive rights on the oil resources of the country and the government decided to nationalize the oil and gas fields, in 1974 government formed General Petroleum Corporation as a state representative and implemented the decision in 1977 by two major nationalized companies Qatar Shell Limited and Qatar Oil Limited. The government has strengthen the Ministry of Petroleum to manage and admitter the oil companies through Qatar Petroleum that coordinates in the export market, control local production by strong accord with the OPEC that contribute the country to mitigate major risk of price fall in the global market (Al-Ghorairi 32; Al-Jaber and Dutta 3).

Post Independence Development

During the post independence era, the oil and gas history of Qatar evidenced many events that contributed the growth of GDP, for instance development of the Al-Khaleej oilfield collaborating with TOTAL Qatar in 1991, discovery of exploratory area (Block 11) in 2001, establishment of several refineries for LPG production during 2006-2010 and finding gas layers at Al-Jessasya in 2008. Further improvement during the period is to diversifying the economy from oil dependency towards different service sectors to conservation of oil resources, waste management for energy and fertilizer production and aim to convert 16% of local power supply from solar power are the new drive for economic development (Qatar Petroleum 75; ICT Qatar 4, Kozeibayeva 9; Ahmed and Al-Roubaie 1).

Works Cited

Ahmadov, Anar. Political Determinants of Economic Diversification in Natural Resource-Rich Developing Countries. 2012. Web.

Ahmed, Allam and Al-Roubaie, Amer. “Building a knowledge-based economy in the Muslim world: The critical role of innovation and technological learning.” World Journal of Science, Technology, and Sustainable Development. 9.2 (2012): 76-98.

Al-Ghorairi, Abdulaziz A. . 2011. Web.

Al-Jaber, Hessa and Dutta, Soumitra. Qatar: Leveraging Technology to Create a Knowledge-Based Economy in the Middle East. 2011. Web.

Crude Oil Peak. 2 oil exporters win soccer games for 2018 and 2022. 2010. Web.

ESQ. History of Oil Discovery. 2010. Web.

Humphreys, Macartan. . 2005. Web.

Ibrahim, Ibrahim and Harrigan, Frank. . 2012. Web.

ICT Qatar. Qatar’s National ICT Plan. 2012. Web.

IMF. . 2012. Web.

Klinger, Bailey and Lederman, Daniel. Export Discoveries, Diversification and Barriers to Entry. 2010. Web.

Kozeibayeva, Leila. Diversification of Economy as a way of Solving the Resource Curse in Kazakhstan. 2010. Web.

OPEC. . 2010. Web.

Qatar Petroleum. Development of Energy Sector in the State of Qatar. 2010. Web.

QSA. Qatar Economic Statistics at a Glance. 2012. Web.

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