Offshore Declines Prevent Qatar From Capitalizing On Opec Exit

16 Jul 2021 Issue: 64 / 28 By: Jamie Ingram

Qatar may have quit Opec, but it still contributed to global production cuts in 2020 as natural declines from offshore fields pushed crude output down to new lows. Burgeoning condensate production more than makes up for the losses.

As the petrostates of the Middle East signed up to historically deep crude oil production cuts last year, one country stood apart: Qatar. Qatar quit Opec effective 1 January 2019 (MEES, 7 December 2018), leaving it entirely free from production restrictions. Its ageing fields meant that the emirate was always unlikely to manage to boost its crude oil production last year, but in the end output actually dropped further in 2020.

According to the recent bond prospectus from Qatar Petroleum (QP), crude oil production averaged 565,000 b/d in 2020. That is down around 4.5% year-on-year from the 591,000 b/d announced in QP’s 2019 annual report, confirming indications from export figures that output had dropped sharply. Crude oil exports are now threatening to drop below 500,000 b/d for the first time since 2015 (see chart 1). (CONTINUED - 1327 WORDS)