Qatar mediating with US officials
Gulf investing in non-energy assets
Venezuela has world’s largest oil reserves
The Qatari prime minister’s visit to Venezuela last week signals heightened Gulf interest in the country after the US forcefully removed President Nicolas Maduro at the start of the year, analysts have said.
Qatar has been expanding its role as a mediator of crises and already acted as a trusted middleman between Venezuelan and US officials, according to Kristian Coates Ulrichsen, fellow for the Middle East at Rice University’s Baker Institute.
Doha recently facilitated the transfer of $500 million of oil proceeds to and from Venezuela by briefly holding the funds in a local account to protect them from creditors’ claims.
That mechanism has now been superseded by a special account set up at the US Treasury Department, according to Chris Wright, the US energy secretary.
But it is Venezuela’s large and underused oil and gas resources that are likely to be of most interest to Qatar and other Gulf states, notably the UAE. The countries have been working to expand their reach across the region by investing in non-energy assets, including in mining, agriculture and in ports.
Reuters/Leonardo Fernandez Viloria
Qatar’s PM, Mohammed bin Abdulrahman Al Thani, and Delcy Rodriguez, Venezuela’s acting president, in Caracas. Abandoned oil pumpjacks on Lake Maracaibo
Venezuela has the world’s largest oil reserves, ahead of Saudi Arabia and Iran. It also has the eighth-largest deposits of natural gas.
Production of both has lagged in recent decades, hit by corruption, mismanagement, underinvestment and US sanctions. Gas has also suffered from Venezuelan officials’ preference for crude.
“It may be that Qatar is well placed to assist in Venezuela’s offshore gas sector which, unlike the oil sector, may be quicker to monetise and bring to market in the post-Maduro landscape,” Ulrichsen told AGBI.
Qatar has the third-largest natural gas reserves in the world and is the sixth-biggest producer by volume. It is also the No.2 exporter of liquefied natural gas.
The country’s output is slated to increase drastically in the coming years thanks to the expansion of QatarEnergy’s North Field.
“There’s an argument that natural gas might be more attractive in Venezuela than oil,” said Rachel Ziemba, a strategy consultant in New York, citing its struggle with uncontrolled flaring.
“It could be either that Qatar is interested or they might be going to check out the competition,” Ziemba said.
Separately, the UAE’s Adnoc is mulling a move into Venezuelan gas through its international arm XRG.
“I think they would be more likely to come in with some international oil company partners for a variety of reasons,” Ziemba said.
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Colby Connelly, a senior fellow at the Middle East Institute in Dubai, suggests gas-rich Qatar may be more keen on Venezuelan oil to diversify its energy profile after crude production peaked there more than a decade ago.
Whereas Adnoc and Saudi Aramco have international strategies that are mostly focused on greater gas exposure, QatarEnergy has shown much more interest in acquiring equity in oil production overseas.
“In that sense alone, Venezuela could fit the profile of QatarEnergy’s international acquisitions over the past several years,” said Connelly.
QatarEnergy has bought upstream oil assets in Brazil, Guyana and Suriname.
Venezuela is also thought to possess significant and largely untapped reserves of gold, coltan and bauxite, among other metals and critical minerals.
These have been a Gulf target across Latin America.
Connelly said that if Doha becomes more diplomatically involved in the situation in Venezuela, the same logic could apply to QatarEnergy taking an interest in international oil company projects there.
“If this dynamic were to in any way facilitate IOC investment in Venezuela, or at least be perceived as doing so, this would serve the dual purpose of Qatar securing resource access for its national oil company – and potentially more importantly, helping Doha remain in the good graces of the Trump administration,” he said.