DOHA: Crude oil price at $60 per barrel is not a bad price for Qatar provided government rationalise subsidies and cuts unnecessary costs, said Qatar’s former oil minister yesterday. Speaking at Doha Energy Forum, H E Abdullah bin Hamad Al Attiyah, ex-energy and industry minister and the President of the Qatar Administrative Control and Transparency Authority, said oil price is expected to be around $60 per barrel at the end of this year.
“In my opinion we can live with oil at $60 per barrel, even below it and we can live good, but the condition is that we cut cost and reform the budget. We lived it (low oil price) back in the 90’s with oil at nine dollars (per barrel),” said Al Attiyah.
He said Qatar’s is not dependent on oil export only. It now but has diversified product portfolio. “Now we have different products, different varieties unlike in 90s when it was only oil. Today we have oil GTL (Gas to Liquids), LNG (Liquefied Natural Gas), chemicals, steel, Aluminum, helium and fertilisers,” he added.
Brent crude prices slumped below $50 a barrel in January this year from highs of above $110 in June last year. Prices have recovered to some extent as Brent Crude hovered around $60 a barrel in February. Brent was trading below $58 a barrel yesterday. Crude prices have declined on the back of new supplies hitting markets, in particular from shale oil production in the United States, and slower global economic growth, including in Asia.
Ex-energy minister said oil is unlikely to breach $60 per barrel mark in 2015.
“In the end of this year we will see oil at 60 dollars but it will take few years to go above $70 level. We should forget the era of crude oil going above $100,” he said.
He said that there are some advantages of lower crude oil prices. According to him, lower oil prices mean low inflation which will benefit construction, oil drilling and other sectors.
“There are some positives of low oil price. Drilling cost and construction cost will come down,” he said.
Al Attiyah said Qatar’s developmental projects will not be affected by the dwindling oil prices. He added that China and India have change the demand dynamics and have emerged as major consumers of oil and gas.