Qatar takes financial stake in its own growth
A major bank, 10 percent owned by Qatar, is looking to cash in on growth in petroleum shipping and is already in control of five tankers.
Doha is part of an innovative international investment scheme seeking to cash in on growth in the petroleum shipping industry – growth that itself is partly driven by what is by far Qatar’s most valuable export: natural gas.
And the man behind the project has revealed it could be just the first in a number of such funds aimed at the shipping industry, as well as other oil and gas related sectors.
At the end of February, the Arab Petroleum Investments Corporation (APICORP), a multilateral development bank, unveiled its self-titled APICORP Petroleum Shipping Fund. The bank is owned by the Organization of Arab Petroleum Exporting Countries (OAPEC), with Qatar holding 10 percent of the bank.
The US$150 million (QR546 million) fund, co-managed by specialist financial services firm Tufton Oceanic, has already acquired five medium-range petroleum product tankers. They will be employed in the regional and international tanker market for five years “to help meet a projected upsurge in demand for petroleum product carriers,” APICORP stated.
The shari’ah-compliant fund is aimed at helping oil and gas companies grow their business while generating regular returns for equity investors. APICORP chief executive bin Hamad Al Nuaimi said, “In this case, the fund helps companies meet their requirements for petroleum products transportation without burdening their balance sheets.” This could be of huge benefit to Qatar’s gas producers.
And the APICORP Petroleum Shipping Fund is by no means a one-off, “We are exploring the development of similar new funds in shipping and other oil and gas sectors to take advantage of further such growth opportunities,” Al Nuaimi said.
The growth forecast for the sector is backed by new figures published by the Qatar Statistics Authority (QSA). According to the group, the number of vessels arriving and departing at Qatar ports was highest during 2011 – the most recent year for which figures are available – when 5353 vessels docked at different Qatar ports.
According to the QSA, the “main types of vessels were oil and gas tankers, amounting to 2694 vessels with a tonnage of 230 million, an increase of more than 174 percent compared with 2010 figures.”
Mesaieed port accounted for the highest share, with 2112 vessels docked in, although this was actually down by two percent year-on-year. Mesaieed was followed by Ras Laffan port with 1944 vessels – a 13 percent increase.
Both Al Nuaimi and Tufton Oceanic director Marcus Machin highlighted the growth prospects. “The positive outlook for demand growth in the global product tanker market creates the right conditions for the success of the fund,” Machin said. “The growth of rapidly industrialising mega-economies like China and India is expected to drive volumes of seaborne petroleum products in the next few years.”
APICORP figures show that, as equity owner, it has invested in a total of 22 oil and gas joint venture projects worth in excess of US$16 billion (QR58 billion).