A quick road to recovery in QatarJune 16, 2020
Abdulrahman Al Mustafawi Al Hashemi, managing director of Al-Tawfeeq Trading & Contracting, talks to The Energy Year about why Qatar’s energy industry is poised to withstand the current crisis and remain attractive for investment. Al-Tawfeeq Trading & Contracting is a trading and construction group active in oil and gas, infrastructure, power and water.
How well has the Qatari government handled the crisis?
This crisis affected certain industries very badly. During the embargo of Qatar, one thing we could do was to move freely. If we could not get material from one embargo-imposing country, we could travel to get it from elsewhere. In this crisis everyone is stuck in their base, and it’s hard to make meetings. But other than that, the government is doing great in providing a stimulus to the economy in order to avoid seeing it break down.
I think Qatar has been one of the best countries at handling this situation. Our per-capita numbers are high, but that reflects how the country has identified those infected to put them in quarantine. In a global comparison, Qatar and Singapore have the least deaths per positive cases. This shows the greatness of our healthcare system and the resilience of our country.
Business-wise, since the embargo many chemical factories have opened, producing cleaning products, soaps, etc. Qatar has also built storage for grain, enough to last for years. These developments have helped with the current situation. As soon as the pandemic started here, these chemical factories shifted their production to sanitiser. Meanwhile, while many developed countries suffered from a lack of masks, medicine and other healthcare products, Qatar had the capacity to aid countries like Italy using its own stock.
Barzan Holdings, the investment arm of the Qatar Armed Forces, already created a manufacturing line for ventilators. Companies have been working very hard to cope with this situation. QP has also done a great job; they have followed the instructions of the Ministry of Public Health, which followed the guidelines of the WHO. QP immediately instructed 80% of its workforce to work from home. Major projects – such as the North Field expansion and the CO2 pipeline – have not been affected at all.
How can Qatar maintain its leading LNG position in the midst of the crisis?
Qatar’s strategic vision [National Vision 2030] is a long-term one and this pandemic is not going to last until 2023 or 2024. For Qatar to keep its leading role in LNG, the country needs to keep investing in its gasfields. Diversions of shipments happen in a crisis, but most importantly, those shipments have been sold. It affects prices, but it is only a short-term effect. It is far from being as bad as what happened to oil prices some weeks ago when they went below zero.
We believe that the industry is going to recover soon and that the LNG industry has not been hit as badly as the oil industry. The utilisation of LNG is also different to that of oil. LNG is needed for electricity generation and factories. But downstream industries which use crude oil as a raw material have also been affected heavily by Covid-19, as have end users such as the aviation industry. LNG is used more for countries’ day-to-day activities.
How is your company tackling the crisis?
Al-Tawfeeq is a big company with many arms in various industries. We are one of the largest players in the hospitality sector and in construction. These have been affected as people have been quarantined. Our activities in the oil and gas industry are continuing. These are not going to change much as investments by QP are ongoing.
We are trying to focus more on diversifying away from the traditional ways of doing business towards new ways that use technology. We are embracing digitalisation in the travel and tourism industry arm and the hospitality arm. We use mobile apps for delivery.
Do you see more opportunities for companies like yours in a post-crisis environment?
We see all oil and gas projects as opportunities. We work with many local oil and gas EPC contractors and we supply them with materials for their projects. We are not going to feel the effect of rate reductions directly as we are an EPC contractor and QP has not stopped any investments or any major projects, so we believe the expansion in the oil and gas industry is still ongoing and we will capitalise on that.
What is your message to investors looking at Qatar in the coming months?
Qatar has proven that it is capable of going through a crisis. We have a solid infrastructure and major investments are continuing. I would call on oil and gas companies to invest in Qatar and to participate in our large-scale projects as our expansion is the biggest in the world and it will not stop. On top of that, the FIFA World Cup 2022 is coming very soon and this alone will give a huge stimulus to the economy. For any company thinking of investing in oil and gas, I would tell them not to hesitate to come to Qatar.