When some of Qatar’s Gulf neighbours and Egypt sought to isolate Doha with a boycott imposed last year, the nation’s top energy official kept a cool head and ensured oil and gas exports barely felt a hiccup. Saad al-Kaabi, a US-educated engineer who rose the ranks to become chief executive of Qatar Petroleum (QP) in 2014, had a contingency plan in hand to maintain energy flows. “It was the best stress test we can have for our system to show whether we are really up for a challenge,” al-Kaabi said in a Reuters interview in Doha, brushing of the boycott’s impact.
“When the blockade happened we had a business continuity plan in every company,” he said in his simply furnished, first floor office in the capital of a nation that has become the world’s wealthiest per capita because of its huge gas reserves. Al-Kaabi has gained a reputation among executives of the world’s energy majors, such as Exxon, Shell and Total, as a reliable counterpart for energy projects that have made Qatar the biggest exporter of liquefied natural gas (LNG) on the planet. “QP has been a top partner for many years and Saad made it even more solid,” said an executive at one of the three majors. His steady hand proved critical when neighbours Saudi Arabia, the UAE and Bahrain, alongside Egypt, severed diplomatic, economic and transport ties in June.
The boycott came as a particular surprise given al-Kaabi had been in talks months earlier to supply gas to Saudi Arabia and increase supplies to the UAE. Qatar has continued pumping gas to UAE under existing deals despite the boycott. Undeterred by sanctions, Qatar announced a plan on July 4 to produce 100mn tonnes of LNG a year, equivalent to a third of current global supplies, in the next five to seven years. Al-Kaabi, who said his business strategy was driven by commercial factors not politics, said the boycott meant Qatar would no longer consider pipelines for gas exports.
“Basically the decision was: if this is what they are doing to us I am just going to go full LNG and never think of pipeline supplies in the future,” al-Kaabi said. Al-Kaabi’s restructuring of QP, one of the world’s biggest energy firms with a daily output of 4.8mn barrels of oil equivalent, had also put the company on a better footing to manage the challenge of the boycott, although the initial catalyst for corporate changes was the low price of oil. Crude plunged from above $100 a barrel in 2014 to below $30 in 2016, prompting al-Kaabi and other industry executives to focus on cutting costs and tightening up a corporate structures that had expanded in the oil boom years.
“My vision is to focus on our core business and get out of anything that is not core business,” he said. “A lot of people talked about downsizing, I was trying to rightsize QP.” QP integrated Qatar Petroleum International, which had been formed in 2007 as a wholly owned foreign investment arm, and Tasweeq, its marketing arm. He also merged two state-owned LNG producers, Qatargas and RasGas. Al-Kaabi said QP’s operating costs would be QR4bn ($1.1bn) a year lower due to the restructuring, which also included cutting jobs to create a more streamlined operation.
Responding to the boycott, QP also said it would set up a fuel oil bunkering business in Qatar after ships heading to Qatar were banned from using the UAE’s Fujairah bunkering hub. Al-Kaabi, who joined QP in 1986 after graduating from Pennsylvania State University, is also chairman of Qatar’s petrochemicals, metals and fertiliser industries, and he sits on the board of the Qatar Investment Authority. Before becoming QP’s CEO, he had worked in the reservoir and field development department, and then became manager of gas development for the North Field, the huge gas reservoir of Qatar. Al-Kaabi’s vision to develop LNG production beyond Qatar’s borders remains undimmed. “We are not just going to be in Qatar,” he said. “We are always going to strive to be the number one LNG producer in the world for a very long time.”
Sources and photo-credits: Gulf Times