FEATURED | Q&A Session with His Excellency Abdullah Bin Hamad Al-Attiyah on the Launch of Al-Attiyah Foundation

By Gulf Intelligence An Exclusive Q & A session with His Excellency Abdullah Bin Hamad Al-Attiyah on the occasion  of the Launch of Hi...

By Gulf Intelligence

An Exclusive Q & A session with His Excellency Abdullah Bin Hamad Al-Attiyah on the occasion of the Launch of His Think Tank - Al-Attiyah Foundation for Energy and Sustainable Development , Nov. 1st, 2015, Doha, Qatar

Q1: Why Did You Create the Foundation & What is Your Vision for the institute?

Answer: I am a man who smells energy, lives energy. I cannot change! I am not a businessman and never worked in business. I decided after more than 40 years in the energy industry to create The Abdullah Bin Hamad al-Attiyah Foundation for Energy and Sustainable Development.

I would like to see The Foundation become the leading think-tank in the region and one of the leading institutions in the world in the areas of energy and sustainable development. The Foundation will aim to give advice and share knowledge, while specializing in research and analysis.  We will create workshops, white papers, seminars and studies about energy - How do we deal with the market, with oversupply, demand and prices?

Q2. What will be Important Areas of Focus for the Foundation?

Answer: We will advise governments and companies on how to build their own projects, how to cut the fat in their expenses, how to avoid market shocks, how to be prepared, how to make the right calculations and how to plan ahead both in the short term and the long term.  We want people to knock on our door with questions which we will aim to answer based on our vast experience. The Foundation will have leading experts from around the world, thinking clearly without the burdens and pressures of bureaucracy, budgets or politics. 

Logo of Al Attiyah Foundation

I strongly believe in empowering our citizens. Educating our citizens is vital for the future of the Gulf region, which faces many challenges, including that of heavy energy consumption. The region has witnessed major developments and now faces big power shortages. It needs more gas and more oil. The local market has huge consumption, which mostly comes at the expense of exporting crude oil.

The Gulf countries have to rethink the generous subsidies they have, they cannot afford them anymore and will have to look at alternatives. They have to reduce subsidies and prepare people to accept that change. The people will protest because they are used to cheap or free electricity and power. I believe this will eventually change culturally because people will realize that they cannot keep depending forever on a depleting product. Young, educated people will be instrumental to that change.

Q3. How do you think the development of young Qatari talent for the energy industry is progressing?

Answer: Developing the energy industry in Qatar was not easy at the start. We had to educate ourselves, but we learned quickly. We should not deny that our foreign partners gave us a lot of technical support that helped us to develop.

Now we are very proud that Qatar’s energy industry is fully managed by Qataris as chief executive officers, and that we have created very successful technical and commercial teams.

We started to create scholarships for Qataris and sent hundreds to study at good Universities especially in the United States, including the current QP CEO Saad Al-Kaabi. Our mission was to prepare young Qataris who can face the challenges of the future. Foreigners come then leave, but citizens never leave. You cannot just build your future on foreign expertise.

Most of the engineering graduates came back to work in Qatar’s energy sector. Today we are also very proud that we have a lot of Qatari women working in the industry as engineers.

Image Attribute:  His Excellency Abdullah Bin Hamad Al-Attiyah on the Launch of Al-Attiyah Foundation, Doha, Qatar - Nov 1, 2015 / Source: The Gulf Intelligence

The scholarship programme continues until now and we are still developing strategic links with educational institutions within Qatar to increase the number of home grown engineers and other specialists. This is not a quick fix, but it will build up the national knowledge base going into the future.

We have expanded the industry very quickly and today we have almost 77 subsidiaries, all trying to employ more Qataris.  We have several strategies for ensuring that we have the human resources that we need to keep pace with our ambitious expansion programmes. Now even our foreign partners are hiring Qataris; they also give us a lot of technical support and we use their training centers to train our nationals. That is a big change from the 1960s, 1970s and 1980s when the IOCs resisted the idea of employing nationals.

Q4. How would you characterize your approach to relations with International Oil Companies?

Answer: I am a big believer in not just signing contracts, but in making sure that we maintain a good relationship, friendship, understanding and trust directly with our partners and customers.

That is why I introduced to QP the transparent policy, including the ethics law and the conflict of interest law. I asked all our employees, including myself to sign them. We told all our partners and customers that they have to sign a legal document stating that no middlemen or intermediaries will be involved in our relationship, that they work directly with QP with no agents or promoters.

We created a direct business relationship with them without agents or middlemen, the people who corrupt the energy sectors in many parts of the world.

When I became minister I told the International Oil Companies that we should stop being at war. “If you don’t beat me and I cannot beat you, join me”, I told them. In the 1970s and 1980s there was always conflict between the IOCs and the National Oil Companies. We had the reserves and the opportunities, while the IOCs had the finance and the technology. I am very proud we came together.

We gave them production-sharing agreements. In the old days they were called concessions, but we refused to call them concessions, we changed the model to production sharing agreements. We said we would not go back to imperialist days. Many countries came to see us for our production sharing agreements and they started using this model.

Q5. What is Your Outlook for Oil Prices?

Answer: I always believed, based on my knowledge of the market, that prices in the hydrocarbon industry go in a cycle, they never stay high or low for a long time.  In my years in the industry, I saw cycles lasting an average of 15 years. I saw how the oil price works, up in the first shock of 1973, then down in 1985. Then it also took 15 years to recover in 2000.

For the last 10 years the oil price was high because India and China entered the market, as big industrial nations, with very high demand. And they bought huge volumes. But because prices go in a cycle, I don’t see the oil price rising to 100 dollars a barrel again anytime soon. We should forget that level of prices for the time being.

Higher oil prices are not always good for producers or consumers. Producers in my experience need a reasonable price for their product and a healthy customer. The debate on price indexation will continue because consumers never had a clear stand on it. When the price is low they want oil indexation, but when the price goes up they change their minds.

Current market conditions have highlighted the importance of dialogue even further. That is why there should always be dialogue and we must learn from past experiences.

Q6. How important is Producer-Consumer Dialogue at a time when the Energy sector is facing so Many Challenges?

Answer: Dialogue is very important, producers need to know what the demand forecasts are going to be so they can make the right investments and consumers need to know if there is adequate supply. This balance is hard to achieve without dialogue. It is always a challenge to work out how producers and consumers can create a formula for stabilization and avoiding shocks in the oil and gas markets. How can they work together, how can they both benefit?

We in Qatar always support greater cooperation between producing and consuming countries and I believe that the traditional confrontation between them should be left in the past.  We should not waste time blaming each other and should seek solutions to ensure security of supply, stability of prices and the curtailment of greenhouse gas emissions.

Q7. OPEC’s Obituary was written many times when facing difficult times over its 50 Years – is this current Period any different?

I went to my first OPEC meeting in 1972, shortly after joining the oil ministry. It was an interesting experience sitting in the back seat learning from the people who were creating oil policies. Since then I attended OPEC conferences regularly for 40 years.

The challenge for OPEC then was how to confront the International Oil Company (IOC) which controlled the industry and benefited from keeping prices low because it owned the concessions and the refineries. The main focus was how to create a lobby to put pressure on the IOCs to increase prices and how to set up National Oil Companies.

In 1973 an oil shock followed the embargo by OPEC and Arab producers in response to US support for Israel in the Yom Kippur war. Prices began rising from two to three dollars to over 36 dollars in 1981. That was a turning point for producers who started to control their own assets and the IOCs started to lose control. By 1975 producers started setting up their national oil companies, but could not get rid of the IOC totally because they needed their technical help. It was a marriage of convenience.

Producers thought the high oil prices would go on forever, so they were shocked when by 1985 the prices started to crash and never exceeded 17 dollars a barrel until 2000. 

OPEC started to talk for the first time about cutting supply and I found that there was no trust amongst the members. They would commit to cutting supply, but some never did. We met many times and meetings started getting longer, from three days to more than three weeks.

One OPEC conference in Geneva lasted one month! We had one meeting and the rest was all bilateral talks on how to convince members to respect production quotas and how much to cut from each country. That made the market nervous and prices went down more. We had to break meeting for one week over Christmas because Swiss security told us they would be too busy to provide us with full security.

In the 1990s, non-OPEC producers were beginning to have a bigger market share, so we started talking to them to persuade them to cooperate. I was elected OPEC president several times, and visited some of those countries.  I said,” you have to support OPEC”, but they never did. In fact, when we cut production to try and control prices, they increased production. OPEC was always open to them, always wanted to work with them.

A Brief Introduction of H.E. Abdullah Bin Hamad Al-Attiyah

H.E. Abdullah Bin Hamad Al-Attiyah

H.E. Abdullah Bin Hamad Al Attiyah Born in Qatar in 1952, H.E. Al Attiyah has some 40 years of experience in the energy industry and has served in a variety of senior leadership positions within the government of Qatar. In 1992, H.E. Al Attiyah was appointed Minister of Energy & Industry and Chairman and Managing Director of Qatar Petroleum, before being entrusted with the additional responsibility of Second Deputy Prime Minister in 2003. Four years later, H.E. was elevated to Deputy Prime Minister, and in 2011 was appointed Chief of the Amiri Diwan. H.E. Al Attiyah has also served as Chairman of Qatar’s Planning Commission, and was elected as Chairman of the United Nations Commission on Sustainable Development in 2006; and the President of 18th Session of UNFCCC Climate Change Conference (COP18/CMP8) Doha-2012. During his illustrious career, Al Attiyah has been bestowed a number of awards and honours including the Grand Cross in the Order of the Orange Nassau conferred by Her Majesty Queen Beatrix of the Kingdom of Netherlands, and the Grand Cordon Order of the Rising Sun awarded by His Imperial Majesty Emperor of Japan in recognition of his contribution in promoting bilateral relations between Qatar and Japan. In December 20th 2011, HE Al Attiyah was also conferred the Necklace of Independence award by HH Sheikh Hamad bin Khalifa Al Thani, the Emir of the state of Qatar, for his salutary contribution in towards Qatar’s commitment to transparency in business and governance and for his efforts towards the progress of the national economy.

AIDN: 001-11-2015-0389