Qatar Has £35 Billion Invested in the UK, Plans to Do the Same in US

  • 7 years   ago

It's widely known that Qatar is one of the richest countries in the world, with the third largest natural gas reserves of any country. At the current rate of output, Qatar should be able to continue supplying the same amount of gas for the next 23 years thanks to provable oil reserves of 15 billion barrels. However, many people aren't aware that Qatar owns a sizable portion of London's land and economy, with approximately £35 billion worth of investments in Britain and another £5 billion planned to be invested in UK infrastructure, energy, and IT sectors within the next five years.

 

Strong Portfolio of Shares and Property

The Qatar Investment Authority (QIA) owns roughly 20% of the London Heathrow Airport, and Qatar Airways is the largest shareholder in British Airways as of July 2016. Add to that the fact that Qataris pay a cheaper price for gas than they do for bottled water, and despite considerable wealth the nation has shown a capacity to be frugal. A recent survey indicates the business owners in Qatar prefer to use cheap or free services even though can afford to pay more. For example, using a free letterhead maker online rather than paying for an expensive software.

The UK's Main Source of LNG

In addition to Qatar's property owning presence in London, the country also provides nearly all of the UK's liquid natural gas (LNG). That's a nice market to have considering the fact that natural gas accounts for about 30% of the UK's fuel imports, and out of those imports about 30% are in the form of liquid natural gas. All of that gas is transported via the South Hook Terminal, an important hub that Qatar Petroleum owns almost 70% of. It also helps that Qatar is situated on the South Pars Field – the largest known natural gas field in the world. Even still, annual oil output for the country is modest, showing an inclination to lean towards a conservative output to promote ongoing sustainability for as many years as possible.

Focus Shifting to the US

While Qatar will still be strategically pouring about £1 billion worth of investments into the UK each year between now and 2022, investment growth has actually slowed down significantly compared to previous acceleration seen within the past decade. The new urgent focus is investing in the US, where the QIA wants to invest roughly $35 billion, which is equivalent to about 10% of its $335 billion sovereign wealth fund portfolio.

Maintaining Centralized Strategies for a Brighter Future

Even though right now Qatar is one of the richest countries in the world, the government realizes that it needs to take steps to maximize, preserve, and properly invest in the country's wealth in the long-term, as alternative energy begins to increasingly compete with the longstanding gas and petroleum industries. Furthermore, with the Qatar-Gulf crisis compromising diplomatic ties with Arab countries, possible economic turmoil could mean a stronger need for the QIA to  make even wiser investments in the near future.

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