Per reporter: Cai Ding Per editor: Gao Han
As the smallest World Cup host in World Cup history, Qatar has invested about $229 billion for the 2022 World Cup, about 30% higher than the country's GDP last year, and far more than the $11.6 billion of the 2018 World Cup in Russia and the $15 billion of the 2014 World Cup in Brazil.
Being able to spend so much money mainly relies on the huge income brought by Qatar's export of oil and gas resources, and the main "financial owner" behind it is Qatar Energy.
In addition, Qatar Energy is one of the seven top sponsors signed for this World Cup, the other six being Adidas, Coca-Cola, Wanda, Hyundai, Qatar Airways and VISA. The addition of Qatar Energy also boosted FIFA's all-time revenue from the World Cup, reaching $7.5 billion.
Oil and gas revenue soared more than 60% in the first half of the year
Qatar, a small Gulf country with a population of just 3 million, has invested at least $200 billion in new infrastructure since it won the bid to host the World Cup in 2010, with most of the money coming from Qatari Energy's LNG export revenues.
The oil and gas industry is the backbone of Qatar's economy and the country's "big money" for the World Cup. According to the Gulf Times, Qatar's oil and gas revenues account for more than 80 percent of total government revenue, equivalent to about 24 percent of gross domestic product.
The sanctions against Russia triggered by the Russian-Ukrainian conflict by Western countries have led to an energy crisis in Europe. In the first half of the year, the benchmark price of TTF natural gas in the Netherlands, which is regarded as the "bellwether of European natural gas prices", rose to 345 euros/MWh (about 23.7 yuan/cubic meter), a record high.
Fears of a "cut-off" of natural gas in Europe have led to soaring demand for Qatari LNG in overseas markets, which has not only boosted Qatari government revenues, but also cemented Qatari Energy's position as one of the world's most important resource companies.
Qatar Energy Corp.'s oil and liquefied natural gas revenues surged by two-thirds to $32 billion (about 230 billion yuan) in the first half of this year, according to Qatar's state media, a huge increase in revenue that also highlights Qatar's ample funds in preparing for the World Cup.
Qatar Energy has built a large "survey portfolio" over the past 10 years, with stakes in projects in Brazil, Canada, the US Gulf of Mexico, Guyana, Suriname, Namibia, Egypt, Angola and South Africa. Qatar Energy is currently aiming to increase its production outside Qatar from 45,000 barrels of oil equivalent per day to 500,000 barrels per day by 2030, including some oil and large amounts of liquefied natural gas.
Saad al-Kaabi, Qatar's energy minister and CEO of Qatar Energy, said in an interview with the Financial Times that Qatar Energy's initial focus is on developing and maximizing domestic gas exports, and will then focus on Qatari Energy's overseas expansion.
International energy giants overseas survey Image source: Financial Times
The Financial Times reported that overseas expansion is not common for state-owned oil and gas companies in the Gulf. While Saudi Aramco and Abu Dhabi National Oil have invested in energy projects overseas, they are not pursuing upstream opportunities, instead focusing on maximizing domestic production.
While boosting domestic LNG production remains a priority, Saad al-Kaabi said the newfound crude in Namibia could provide a "versatile" role and provide a source of production outside of gas-focused Qatar. "We want to have a mix of oil and gas in our portfolio," he said.
Once on the verge of bankruptcy, with the "big bet" of liquefied natural gas to come back to life
Qatar Energy, founded in 1974, was founded as Qatar Petroleum. In the early 90s, when Qatar Energy was heavily indebted and on the verge of bankruptcy, the company's leaders made a desperate bet to develop and export liquefied natural gas in Qatar's northern oil fields, the world's largest natural gas reserve.
At the time, Gulf governments had traditionally placed less emphasis on natural gas and more on oil resources, and Qatar Energy's heavy bet on LNG at the time was seen as a gamble. In 1992, BP pulled out of Qatar Energy's LNG project on the grounds that it would not yield sufficient returns.
However, five years later, Qatar Energy formed partnerships with giants ExonMobil, Total Energies, Mitsui and Marubeni to build its first LNG export facility. In 2006, Qatar overtook Indonesia to become the world's largest exporter of liquefied natural gas.
For the next 10 years, Qatar Energy suspended further development of the northern oil fields while completing the then existing projects. Meanwhile, Qatar Energy almost never misses the opportunity to ship LNG to its customers.
In 2017, the Qatari government made another big bet and announced huge LNG expansion plans, which also attracted the attention of other energy giants. As part of Qatar Energy's overseas expansion, companies including Shell and Total have invited Qatar Energy to join them in projects in other parts of the world.
Qatar's global LNG share trend Credit: Financial Times
Qatar Energy has now established a global exploration partnership, with Shell, ExxonMobil, ConocoPhillips, Total and Eni all signing new agreements in Qatar's northern oil fields, which will help increase Qatar's domestic LNG production capacity from 77 million tonnes per year to 126 million tonnes by 2027, an increase of about 64% over current capacity.
In addition, from 2025, Qatar Energy will also enter into a partnership with ExxonMobil called Golden Pass to produce an additional 16 million tons of LNG per year.
Today, Qatar Energy is not limited to liquefied natural gas, it is also investing in petrochemical production and solar energy in Qatar, but unlike its publicly listed partners, Qatar Energy has not set net-zero emissions targets for its operations.
Saad al-Kaabi said there were no plans to list Qatari Energy in the future. He believes that although natural gas emits a large amount of carbon when burned, it is lower than oil and coal, so it should be at the center of the world's energy transition.
In addition, on November 21, Beijing time, Chinese energy giant Sinopec also signed a new agreement with Qatar Energy Company.
Sinopec signed a 27-year long-term purchase and sale agreement for liquefied natural gas (LNG) with Qatar Energy Company, and Qatar Energy will supply 4 million tons of LNG to Sinopec every year, according to SSE reports. The agreement is an important part of the integration and cooperation between the two sides on the expansion project of Qatar's northern gas field. The Northern Gas Field Expansion Project is expected to be put into operation in 2026. It is reported that this agreement is the second LNG long-term purchase and sales agreement signed by Sinopec and Qatar Energy Company, and the first LNG long-term purchase and sales agreement for the Qatar Northern Gas Field Expansion Project.
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