The current Gas Production capacity is built from capital raised on future gas production by way of licensing rather then a loan.
The concession holder needs to produce x-amount of gas for y number of years to re-coup investment based on their projections of Gas price. In this duration, they will share revenue with the Government.
Typically these projections are hugely under-estimated to reduce the risk and incrase long term profits.
I don't see any scenario in the current situation where world wide demand for Natural Gas will reduce rather than increase. Therefore, we can expect the price to continue to climb due to demand and supply law.
When the price goes up, so does the profit for the investor: The Oil/Gas company. This increases the motivation to invest.
Having said that, perhaps the Oil price and Investment graph may lose it's steepness for a while but in long term, business continues.
Longer the slowdown in capital investment, higher the price of Gas due to the fact that demand will contiue to increase while production will not. This will inrease the pressure to invest.
The risk to GCC countries comes from Bank failures in US. They have huge amounts of money invested there. But that is all Earned Capital which is Not invested here and is not contributing to local economy in any direct way.
Another risk is short term liquidity due to credit crunch. But this is not a huge problem. I am guessing that with rise in interst rates, there will be investors and bankers who will bet on the Petro-revenue.
Current or future production/revenue, which is the base measure of their economic performance, is not at risk at all.
Therefre we can conclude that Qatar economy is sound.
The current Gas Production capacity is built from capital raised on future gas production by way of licensing rather then a loan.
The concession holder needs to produce x-amount of gas for y number of years to re-coup investment based on their projections of Gas price. In this duration, they will share revenue with the Government.
Typically these projections are hugely under-estimated to reduce the risk and incrase long term profits.
I don't see any scenario in the current situation where world wide demand for Natural Gas will reduce rather than increase. Therefore, we can expect the price to continue to climb due to demand and supply law.
When the price goes up, so does the profit for the investor: The Oil/Gas company. This increases the motivation to invest.
Having said that, perhaps the Oil price and Investment graph may lose it's steepness for a while but in long term, business continues.
Longer the slowdown in capital investment, higher the price of Gas due to the fact that demand will contiue to increase while production will not. This will inrease the pressure to invest.
The risk to GCC countries comes from Bank failures in US. They have huge amounts of money invested there. But that is all Earned Capital which is Not invested here and is not contributing to local economy in any direct way.
Another risk is short term liquidity due to credit crunch. But this is not a huge problem. I am guessing that with rise in interst rates, there will be investors and bankers who will bet on the Petro-revenue.
Current or future production/revenue, which is the base measure of their economic performance, is not at risk at all.
Therefre we can conclude that Qatar economy is sound.