Doha, Qatar: The North Field projects will support both hydrocarbon and non-hydrocarbon growth over 2025-2030, a recent report by Fitch Ratings has said.
The North Field contains huge additional gas quantities estimated at 240 trillion cubic feet, which raises Qatar’s gas reserves from 1,760 to more than 2,000 trillion cubic feet, and the condensates reserves from 70 to more than 80 billion barrels, in addition to large quantities of liquefied petroleum gas, ethane, and helium gas.
The Fitch Ratings affirmed Qatar’s credit rating at ‘AA’ with a stable outlook recently which reflects one of the world’s highest GDP per capita.
“Our expectation that additional gas production will strengthen public finances and a flexible public finance structure. We forecast Qatar’s general government (GG) budget surplus at 3.9% of GDP in 2025 (2024: 4.8% of GDP), including our estimates of investment income on Qatar Investment Authority (QIA) external assets (0.9% without investment income in 2025).”
“Oil and gas revenue will drop under our assumption that the Brent oil price will average $70/bl in 2025 (2024: USD80/bl). We expect the budget surplus to narrow further in 2026 at 3.3% due to lower hydrocarbon prices (Brent: $65/bl) and a moderate rise in current spending,” it added.
Regarding surge in LNG production, it noted, QatarEnergy plans to expand liquefied natural gas (LNG) production capacity from 77 million tonnes per year (mtpa) to 110 mtpa in 2026, 126 mtpa by end-2027 and has announced further expansion to 142 mtpa by end-2030.
“We assume QatarEnergy will cover $12.5bn of core project costs out of its 2021 bond issuance and a similar amount from its cash flow, spread until 2028, in addition to contributions by partners. Funding plans for the 2030 phase will depend on hydrocarbon prices at that time but we expect it is likely that most of the project will be funded with internal resources. North Field projects will support both hydrocarbon and non-hydrocarbon growth over 2025-2030.”
It further said, “We project the first phase of the North Field expansion to start supporting fiscal revenue from 2026 and phase two in 2027, assuming no construction delays, and to bring down Qatar’s fiscal breakeven oil price to $58/bbl in 2027 from around $73/bbl in 2024, excluding estimated QIA investment income (to $49/bbl from $63/bbl including investment income).”
Fitch stated, “We project debt/GDP to fall to about 43% of GDP by 2027 from 49% in 2024 and a peak of 85% in 2020. This reflects our expectation that the government will refinance most upcoming external market debt maturities and pay down external loans with moderate budget surplus excluding QIA investment income.”
It also estimates that sovereign net foreign assets (SNFA)/GDP rose to 187% ($398bn) in 2024 from 163% ($347bn) in 2023. This reflects the drop in nominal GDP, a sharp rise in the QIA’s estimated assets, which we assume were buoyed by asset market returns.
Qatar’s banking sector is large with assets of 265% of GDP and net foreign liabilities of over $117bn (55% of GDP) in 2024. Bank’s foreign liabilities resumed their upward path in 2024 to $197bn, although Fitch noted that that the maturity profile of those liabilities has lengthened following the central bank’s introduction of measures increasing the cost for banks of short-term foreign financing.
