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tv   Inside Story 2018 Ep 337  Al Jazeera  December 4, 2018 3:32am-4:01am +03

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so to tional the speaker of britain's lower house of parliament says the government may be in contempt for not publishing the full legal advice on its regs that deal m.p.'s from six parties want proceedings to be launched after the attorney general only released a summary parliament's due to vote on power minister to resume his agreement with the next week. leaders of the so-called yellow this protest in france are due to meet president emanuel macro on tuesday they're angry at rising fuel prices but the demonstrations also evolved into one of a criticism of the president's policies some of the worst rioting in the years took place on saturday and four hundred protesters were arrested. the government under continued into monday when private ambulance workers traffic in the capital iris. well those were the headlines the news continues here on al-jazeera of the inside story of them so much about that.
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qatar is set to quit opec oil cartel after more than fifty years and said it will focus on natural gas and boost its position as the world's number one export or so why now what does it mean for the global energy market this is inside story. hello and welcome to the program i'm richelle carey qatar's leaving the organization of the petroleum exporting countries or opec the first gulf country to pull out since joining more than a half century ago qatar plans to expand its role as the world's number one export
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of liquefied natural gas and boost production by more than fifty percent to one hundred ten million tons a year the decision to quit opec comes just days before crucial meeting of members in vienna to discuss cutting supplies or oil prices reached a four year high of more than eighty dollars a barrel that was a couple of months ago but now has dropped to about sixty first let's hear what they call minister of state for energy affairs had to say. it has become clear to us that achieving old ambitious ties to india and undoubtedly rickards requires focused efforts commitment and dedication to maintain and strengthen capital position as the leading an energy producer therefore based on that requirement as well as the size of our oil production the state of qatar has decided to withdraw its membership from the organization of petroleum exporting countries of pic effective january twenty nine thousand this decision was communicated to operate
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this morning i would like to reaffirm couples pride in its international standing at the forefront of the natural gas producers and the biggest energy producer in the world as the cleanest fossil fuel known to mankind which has given birth of a strong and resilient economy. opec was formed in one nine hundred sixty by five countries qatar joined the following year now there are fifteen members accounting for around forty percent of the world's oil production qatar is one of the smallest producers saudi arabia produces more than ten million barrels a day qatar pumps around six hundred thousand barrels a day but it is the world's biggest supplier of liquefied natural gas seventy seven million tons a year almost thirty percent of the world total and wants to increase that most of the l.n.g. comes from two or oil and gas fields including the world's largest for natural gas which is shared with iran.
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let's bring in our panelists in london we are joined by cornelia meier who is an economist and energy expert here in doha we have adela boudin academic and researcher focusing on the gulf region and the middle east also in london on a share of talk in international oil an energy consultant and former opec official welcome to the program appreciate all of you joining me adel i want to start with you are you surprised by this announcement. north really i think given the size of qatar oil production and given its focus on she and goes production. and its focus on guys markets. and the fact that qatar also horse the. global center does the global forum for goes it's its interest it's been shifting more towards gaza because that
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is really what the weather state of qatar economy. resources so it's production is not that great it's about six hundred to seven hundred thousand barrels a day it's one of the smallest countries it doesn't only say all much c all much effect in opic and given the politics within opec and the fact that opec is being manipulated for political reasons i can understand why you would want to do this and come out of it and concentrate. on its major resource which is guess we're going to come back to that point that you made about whether this is political but first i want. you to answer the same question were you surprised by this. yes i was surprised by it because you know been following it closely for about every meeting for about fifteen years and it's a bit like a family and like in families you know you have to close this but you also have to
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squabbles that's just part of being a family so i was i was saddened to see the first member to have joined after it was in this chilly for him at this number six member to leave but i totally understand the decision because you know six hundred thousand barrels a day is nothing compared to the thirty two point five million barrels a day that opec produces so it doesn't really have weis and it makes sense there's only so much executive time that you have so if you really want to focus where you have matter yalit t. you've focused the executive time to ministerial time the c.e.o. time then yes absolutely i understand why did this but a share you're the former opec official here so what's your reaction to it. well for me it is it was a complete surprise and i cannot explain it the way out of two colleagues explain why apartheid is d.v.
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the fact that six hundred thousand dollars per day is less than the others which produce a few million saudi arabia ten million a year on year three or four million it doesn't matter because opec is a club of volunteers and when the ministers sit in their discussion during one of their conferences they act as a group of businessmen to try to consult each other and see what is good for all of them as producers that exporters of oil and they are all in the same boat. the smaller producers do have a say and the other ministers listen to them and they discuss with them as they listen and discuss with the minister from a country which produces a large amount of oil in fact we can look at the last two three years that i did play a good role a diplomatic role in the case of an impasse that's was in the three thousand and fifteen and sixty the price of oil had fallen and they wanted over group wanted to
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bring in the non orpik countries in the russian minister was not happy in two thousand and fourteen when they met in november. but later on diplomacy played a role of different countries saudi arabia itself but played but they did play an important role in fact in getting the russians and other non orpik coming in and having this present cooperation of opec and not opec's although a smaller producer relatively ok speaking but they did play a role obviously a lot has changed since then there is the blockade we don't know for sure that these two things are connected but adel i want to put this question here the manners minister minister rather energy affairs said this. we are not saying we are going to get out of the oil business but it is controlled by an organization managed by a country he didn't name a specific country it would seem that he is alluding to saudi arabia do you do you
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agree with what my to share saying that that everyone does have a voice. everyone does have a voice within the vic but. overall voice is basically the major producers and that is saudi arabia and for in the recent years saudi arabia has not been. very sensitive to its partners within and it's been deciding. on its own tool increase production or to reduce production. some times and most cases for political reasons or because of pressures from the united states or in this case because strong once the prices oil prices to be down and we have seen that. even with the increase in the oil production of saudi arabia or traumas asked for more and basically given its major role and given that it is the country that mostly
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decides. their level of oil production and without its agreements other countries will not be able to come to an overall agreement and given it some time soon or political if you like production and raising or reducing for political reasons i think you not only qatar but i think some other countries. are getting the sense you know what's the point of working and an organization where we do not have a say and we don't not. our interests are not respected although of a delegate understand i can see cornell here wants to get in on that go ahead. so you know i think yes obviously i'm in between the two ended in between the two views of we had obviously you know obviously the big producers have more of a say but the smaller producers are consulted and i would say one of the big
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achievements that we have seen in opec was really this opec plus having opec and the other producers work together and you know it's not it's not as easy as saying oh it's just political it's about balancing the markets and when you look at it in twenty sixteen we had an overhang of inventor of of o.e.c.d. average of three hundred forty million barrels a buff that average you couldn't get the price to move then taking that one point eight million barrels out of the system again lift up the price which was good also for consumers in the end because if you all price doesn't have the certain level companies don't invest the national oil companies in the middle east yes they will invest but you know we also need the shells and exxon's and so on to invest and their shareholders will only allow them to invest in the sector if the price is at a certain level so do you think that cut that qatar leaving even though there or
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footprint isn't that big you're saying that they did have a lot of say so in opec and cornelia makes a case of a person the things they've done what kind of impact do you think this will have on opec. i don't think you will have much impact you see other countries like indonesia ecod or gab own me have left or pig and have joined rejoined later so it doesn't matter in fact as i think the lady our colleague just mentioned the objective or pick and it's scope of group have in large by having this cooperation with the non or big group of countries the so i don't think that the role of. was a small day as i explained especially bringing in russia and other non orpik it did play a role and they always have a consultative agreement you see the we worst cases are for iran and iraq indian
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one nine hundred eighty s. they were at war with each other and yet the ministers when they were in vienna were going over the opec conference was organized they discussed as a group for among them but differences do exist and a country which has a large production capacity has a muscle and in it a greater a stronger negotiating power to discuss but this tensions and problem do are as i think i could mention the venezuela that in the late one nine hundred ninety s. did not observe its production code and it made the price come down and it went on for forty years and there was a bitter bitter criticism especially with saudi arabian been izabella about the overproduction of venezuela over that previous use it at the end it led to the loss of confidence and opec broke down the code system and everybody produced a huge amount of oil price fail but again let me bring in they got together stood
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understood let me they all get together to reach an agreement ok let me bring in an adult i don't know why it absolutely is and we bring in a bell on that point chris cornell you said that as well that that is a family that family have squab have squabbles what do you what type of precedent do you think that this if any. well let's also remember that the not all of the gulf states members of opec and mine for example is not a member of because never been a member. been mentioned you can come out of the can come back again. and there is already corporation between or big can then all pick producers and sometimes if you are outside or pick. gives you a certain role to play. in or small producers do not have much say within the object mechanism itself and the decision making they can probably play a very important role outside. so i don't i think it is
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a giving of presidents because this is the first gulf oil country to come out of our pick but there are other countries been mentioned that have come out and some of them gone back. and but i think it's also sending a message to opec that there are countries that are unhappy with the way that our big business is being handled. by the large producers sometimes contrary to the interests of the small producers and if you are a small producer in your outside you probably have much more leeway and much more flexibility on your level of production see if you were inside of it so i think it might give other countries some some kind of a hint that you can also. preserve your interests outside of dick. i guess i guess we'll soon see cornelia let's talk about the fight natural gas
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that's what qatar is known for that's what they're saying they want to put more of their focus on can you talk to us about what the footprint that liquefied natural gas has in the energy market and how it's increasing or it's increasing tremendously because asked and especially to. it's moving it's really getting very strong on on on on on on the whole environmental agenda and they need to and being that gas is the cleanest fossil fuel they need to really increasing their capabilities of you know gas powered but gas fired power stations and. so yes there is a big future for elenchi and you've seen actually america is jumping on that game as well with even the u.s. starting to export l.n.g. so yes there's a big future for l.n.g. and it does set us a set it doesn't make sense if you are a company or a country it doesn't make sense to to focus your executive time on on the
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bit of the business that has a real map to yallop you saw in that sense it makes sense although this being said i'm very sad to see. want to share is that apples and oranges when you're talking about opec and then creating a cartel when it comes to liquefied natural gas is that really the same or or how would it be different what are the challenges there. well first of all the two are different oh pick is for crude oil whereas and it is it used to in the one nine hundred eighty s. used to actually decide on the price of ford and then later on since one hundred seventy four to eighty five did decide to price and from eighty six onwards opic controlled and decides on the level of production which indirectly that as affect the price of oil but the group of oil exporters forum which is actually headquarters in doha you know that it is not on price the situation as as opaque that as on the price of oil it is not on reprise off gas gas has
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a wider distribution in the sense that you have to have a consumer and a producer or a group of consumers making a joint agreement and a huge investment and commitment over a long term twenty years or so for especially and l.n.g. project even less so but the still commitment when you have to make a big construct a major pipeline to transport gas from the x. yes exporting country to a consumer country so gas trading generally has been on the long term basis ellin g.d. liquefied natural gas and tankers have provided a little leeway on a margin of basis in the volume of gas traded in fact is becoming more as a sort of a spot trade short term like have access tankers of ellen g. to three years ago and used to be exported to europe and on
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a spot basis but generally the gas in general natural gas and l.n.g. all are under long term sub. seller and buyer basis of with the involvement of banks to provide a usually a consortium of banks getting together to provide to finance and this whole thing over a long ten twenty or thirty years commitment to each other they may be flexibility on differ. and so on so that the role of that forum in qatar is to coordinate and negotiate consult with each other as exporters and see what has been if you for them do research and have that's research information before it is quite different from. the understood understood or like your some of your insight on that as well that is there is there really the possibility of ever creating an opec type organization when it comes to liquefied natural gas i mean it seems that want to share is saying it's not the same i'm still i'm skeptical look if you if i look at
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gas gas is essentially regional because you need to build a pipeline as minister said you need to build a pipeline you need to build the infrastructure to get the product to markets so it's more regional the only thing that made it global is elenchi where you liquefied and use you use you ship it around but because so little is is global you can put it on a barge you can put it on or on a truck you can put it in there in the ship and you can ship it to the market so well with some gas you need to find the market and then the gas and with oil you find the oil of the market will find itself so in that sense it's a very different thing yes there is absolutely the little gas producers cooperate ing and talking to each other but it will never it will not be possible to have the same mandate as opec has which is to balance the market because of its if it's defacto regional regional mention dollars surely you know qatar know is
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these things the energy ministers know these things they know what the challenges are they know what they are trying to do what is the the biggest threat to what they're trying to accomplish to continue to be dominant in elegy what's the biggest threat to that. well i just want to also add to what has been said which i totally agree with you know the difference between an oil and one is global and the other resolution or with certain differences there is also the history of of a came at a time when the oil producing countries where dominated by international oil companies and it was very important for these countries to get together to create an organization that can help their interests i think gas came much later and the market has changed not only that it is a vision of but also the political situation of change and we don't have the dominance of the international if you like
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a major us. determining not oil only the price but also how much to two there be two of the to the current countries but in terms of what qatar is achieving the challenges for oil and gas still is their. gas is probably enjoying a better. prospect than oil but the challenges are there to be shared go as is competing largely with. l.n.g. the united states being the major producer. satisfying some of the markets the main markets are now is china and the east but in the in the long term you will have pipelines coming from russia to china that will compete with our with the l.n.g. market so japan is also moving more towards nuclear so there are going to be major challenges although i think all is more challenge than the national guys being.
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the latter being of course the more clean out energy but i would not discount the challenges that as a natural natural gas but also l.n.g. is going to face in the future and i think qatar wants to concentrate on this market and in this industry given it's a small country given the capacity. of its you know administration and its government attention it wants to pay more attention to l.n.g. that to its more than merely source if you like cordelia go ahead. yes i was just in defense of oil you know it's oil demand are still growing by one point three million barrels a year. day next year and one point four million barrels a day this year it's forecasted to stick commanders forecast to grow until them at least the mid twenty's thirty's and the demand comes all is to fuel for transportation and for petrochemicals up until about from now until about twenty
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thirty thirty percent of the demand of oil will come from petro chemicals from twenty thirty to about twenty fifty it will be fifty percent so as long as we need . and as long as we need to ship freight and fly around we will need oil on a sherman i'm going to give you the last word on this is opec still as relevant as it once was. yes i think opec is relive and as we just heard from our colleague oil would to still have demand for it for the next twenty thirty years gas is important because it is growing directly at the faster rate is expected to grow rather faster rate than oil in the next ten twenty years and it has the image of being which is true it cleaner sort of energy a source of energy but it is important and the price of oil will be subjected to these ups and downs butu excess supply and demand or politics and i think being
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a member of an organization like opaque would have been a very good for. to remain down i'm still surprised i cannot convince myself these reasons of why over time is leaving. leaving opaque because he doesn't have enough resources to take the clear and refined then surely to be a member of opec and also concentrate that expand its resources on its main its business which is l.n.g. the export oil i appreciate your honesty about about the questions and i thank you all for this dialogue very very much we'll have to see how this all plays out thank you tall cornelia meyer a developer of boot and money to share talk and thank you all at thank you for watching as well you can see the program again any time if you visit our website al-jazeera dot com for further discussion of our facebook page facebook dot com forward slash a.j. and side story you can also join the conversation on twitter our handle is at age
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