By Peter Kovessy:Doha News
To squeeze more money out of its oil and gas resources, Qatar is considering creating a new government-owned company to market and sell its petroleum products.
The move, which got the Cabinet’s approval yesterday, comes as the country consolidates several of its state-backed agencies and slims down its government operations.
The draft law signed off on by the Cabinet would “delegate Qatar Petroleum as a representative to market and sell government-regulated products on its behalf.”
It would amend Decree Law No. 15 of 2007, which is the measure that created the Qatar International Petroleum Marketing Co. (Tasweeq) nine years ago.
Currently, Tasweeq sells all of Qatar’s petroleum exports. It is not a Qatar Petroleum (QP) subsidiary and on its website, says it “operates independently from other oil and gas companies.”
Instead, it buys refined products such as propane and butane from producers including QP, QatarGas and RasGas and then resells those products under its own name abroad.
Tasweeq said last year it exports approximately 44 million tonnes of petroleum products annually, with one-quarter of its sales going to Japan.
However, a 2014 report by Oxford Business Group said Qatar’s output is on pace to grow considerably as new manufacturing facilities are completed.
Any changes would still need to be approved by the Emir. But they are adopted, Tasweeq’s responsibilities would be handed to Qatar Petroleum. This would be the latest shakeup involving one of Qatar’s largest energy firms.
Starting in late 2014, Qatar Petroleum underwent a restructuring that included a takeover of its foreign investment arm, a sale of non-core assets such as a catering company and the laying off of expat employees, Bloomberg reported last year.
The move came amid a broader restructuring of Qatar’s government, which is grappling with lower revenues due to the prolonged slump in oil prices.
In an economic update week, officials said they expect to run budget deficits for at least three years and are trying to cut government expenditures and administration costs.
In addition to consolidating state ministries, some government-backed organizations and agencies are also being streamlined, including the Qatar Investment Authority.
A Tasweeq spokesperson did not immediately respond to a request for comment.