Qatar was previously one of the poorest areas in Arabia. The business sector included pearl diving, fishing and some nomadic food. With the extraction of the country’s petroleum deposits after World War II, and the country’s independence in 1971, Qatar has become one of the world’s richest countries. Modernization took place especially from the 1970s, with significant investments both in infrastructure and service industry and in industrialization – primarily related to oil and gas extraction. Qatar has a relatively modest production of crude oil, but possesses the world’s third largest known natural gas reserves, after Russia and Iran.
Qatar has scarce natural resources except for oil and gas, and only a small part of the land is suitable for agriculture; Lack of water is another limitation for agriculture. The development of the country’s economy has to a large extent been based on cooperation with foreign capital and technology, as well as foreign labor in all areas. At the beginning of the 2000s, approx. 85 percent of the total number of employees of foreign origin. Based on revenues from oil exports, Qatar has invested heavily in modernizing society in all areas, and the population is enjoying a high standard of living. Due to lower oil prices in parts of the 1980s, infrastructure and industrial development slowed somewhat, and the country incurred considerable foreign debt, but the modernization process, including efforts to make itself less dependent on the petroleum sector, accelerated again in the 1990s. The economic significance of the petroleum sector has therefore, relatively speaking, become somewhat less. In 2005, oil and gas accounted for just over 60 percent gross national income (GNI), approx. 85 percent of export earnings and approx. 70 percent of the state’s revenue. Like other countries in the Arabian Peninsula, Qatar has also focused on tourism development.
Qatar’s land area consists mainly of desert and is little suitable for agriculture, which accounts for less than 1% of GNI. Agriculture is based on artificial irrigation and some vegetables, grains, dates and fruits are grown. There is also some livestock farming, including cattle, camels, sheep, goats and poultry, but the country is heavily dependent on food imports. There is some fishing, mainly for shrimp.
Qatar has a significant industrial sector, which is essentially developed in connection with and based on energy from the country’s oil and gas resources. The industrialization strategy initially consisted of establishing businesses in the extension of oil and gas extraction, and then by developing a somewhat wider complex industrial base. The country’s hydrocarbon deposits have formed the basis for the development of several large companies in the chemical industry, in particular refining of oil, conversion of natural gas to liquid gas (LNG), as well as the production of mineral fertilizers, aluminum and steel. The oil refinery at Umm Said was upgraded in 2002 to a capacity of 137,000 barrels per day. The world’s largest LNG plant was opened at Ras Laffan in 2004, with a capacity of 4.7 million tonnes per year. Other industries include bant other cement production. Umm Said is Qatar’s industrial hub.
Norsk Hydro has an extensive involvement in Qatar since the late 1960s, primarily through a collaboration with the Qatari State on the construction of ammonia and mineral fertilizer production facilities through the company Qatar Fertiliser Company (QAFCO). This was established in 1969, and began production in 1973. A fourth development (Qafco-4) was inaugurated in 2005, with an annual capacity of 1.1 million tonnes of fertilizer. The Qafco plant thus became the largest in the world. Norsk Hydro’s share of 25 percent accrued to Yara International when it was demerged from Hydro in 2004. Yara signed a 25-year agreement on the supply of gas from Qatar in 2006. In 2006, Norsk Hydro signed an agreement with Qatar Petroleum (QP) to establish a joint company, Qatalum, to develop, build and operate a plant for aluminum production in Qatar, with an annual capacity of 585,000 tonnes in 2009. QP and Hydro each have a 50 percent stake. Hydro is also part of another company in the chemical industry, Qatar Vinyl Co.
Qatar has significant oil reserves and large gas reserves, and the country’s economic development has been, and continues to be, based on oil and gas extraction and export. Oil exploration started with the first concessions in 1935, and the first discoveries were made in 1939. The war delayed recovery and the first exports happened in 1949. By the country’s independence in 1971, the oil industry was reorganized, with larger state interests, but still with extensive foreign participation. Qatar joined OPEC in 1961 and from the 1970s has been subject to the organization’s quota regime. The country’s production has varied considerably, and was close to 800,000 barrels per day in the early 2000s. Total production from the entire sector was just over 1 million barrels/day.
Qatar’s well-known oil reserves in 2005 were approx. 15 billion barrels, with the Dukhan field (onshore) being the largest; in addition, the country has six offshore fields. At the same time, natural gas deposits were estimated at approx. 910 trillion cubic feet; corresponding to approx. 5 percent of the world’s occurrences, and the third largest in the world. Qatar’s offshore North Field is the world’s largest free-standing gas field. The gas deposits were detected in 1971, and the first deliveries took place in 1996. The country has developed an extensive petrochemical industry, refining oil and converting natural gas into liquid gas for export. Almost all oil production is sold to Asia, with Japan as its largest customer. Asia is also the primary market for gas, which is also exported to Europe and the United States. In 1999, agreements were signed with a view to building a Qatar gas pipeline United Arab Emirates and Oman – with a possible submarine extension to Pakistan.
Qatar had an installed capacity for 8.56 GW of electric energy in 2016. Almost all power generation is based on the use of natural gas.
Qatar, thanks to oil and natural gas exports, most often have a trade balance surplus abroad. Varying levels of production and prices, as well as large imports as part of the modernization of the country, have at times created deficits. According to Countryaah, petroleum products usually account for 80-90 percent of export revenues. Japan, Korea, Singapore, the United States, the EU, Saudi Arabia and the United Arab Emirates are among the most important trading countries.
Transport and Communications
About. 1200 km away, the capital of Doha, Dukhan and Mesaieed connects to the northern tip of the peninsula. Via Salwah in the south, Qatar has road links with Saudi Arabia and on to the Mediterranean, and it connects southeast to Abu Dhabi in the United Arab Emirates. Main ports are in Doha and Mesaieed. From 1995 new industrial port at Ras Laffan (outside al-Huwaylah). International Airport at Doha, which underwent modernization in the early 2000s, and fishing ports in Al-Khor and Doha. Qatar withdrew from the regional airline Gulf Air in 2002, and the state subsidizes the company Qatar Airways.