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Qatar to merge state gas producers

December 12, 2016 at 4:10 pm

The chief executive of Qatar Petroleum said yesterday that the country is merging state-owned liquefied natural gas producers Qatargas and RasGas in its latest attempt to lower energy prices. The slump in oil prices, which has been ongoing for over two years, has forced Gulf countries to turn to austerity measures and consider such consolidations as a way to cut costs.

The merger of Qatargas and RasGas, Qatar’s number one and two LNG producers respectively, has been discussed for a number of years, from well before the oil price reduction.

While Qatar is more focused on gas than oil, it too has been forced into reorganisations, with Qatar Petroleum already going through a process that has reduced the number of staff and earmarked a number of assets for divestment.

At a news conference, the CEO pf Qatar Petroleum, Saad Al-Kaabi, said that there is an element of wanting to cut costs behind the announcement. “Of course, as a result of this cost reduction we will be more competitive in the market,” he said, adding that the move would save “hundreds of millions of dollars.” He did not give a timeframe for the savings.