Qatar Economic Review October 2009

Qatar Economic Review OCTOBER 2009
Qatar
Economic Review
Qatar Economic Review is a publication of QNB Capital.
All the information in this review has been carefully collated and verified. However, QNB
Capital accepts no liability whatsoever for any direct or consequential losses arising
from its use. Where an opinion is expressed, unless otherwise cited, it is that of the
authors which does not coincide with that of any other party, and such opinions may
not be attributed to any other party.
Qatar Economic Review is distributed on a complimentary basis to valued business

partners of QNB Capital. It may not be reproduced in whole or in part without
permission.
Contents
Sovereign Ratings 05
Overview of the State of Qatar 06
The Economy of Qatar 10
Key Economic Sectors 14
Inflation 31
Balance of Payments 33
Monetary Policy 38
Banking Sector 40
Domestic Credit Facilities 43
Public Finance 45
Qatar Exchange 47
Investment Incentives 51
Qatar National Bank (QNB) 53
QNB Ratings 54
Appendix 55
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PO Box 1000 Doha, Qatar
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© QNB Qatar Economic Review
4 Qatar economic review

Qatar Stands Among the Highest Rated in the GCC
Sovereign Ratings: State of Qatar

Qatar stands among the highest rated GCC countries along with UAE and Kuwait
(Table 4), and is currently rated by Capital Intelligence, Moody’s, and Standard
and Poor’s.
Table 1: Foreign Currency Local Currency Outlook

Capital Intelligence ratings for
Qatar Long-Term Short-Term Long-Term Short-Term
Source: Capital Intelligence. AA- A1+ AA- A1+ Stable
On January 30th, 2008 Capital Intelligence (CI) raised the sovereign long-term
foreign and local currency ratings to AA- from A+, and the short-term foreign and
local currency ratings to A1+ from A1 (Table 1). The outlook for Qatar’s ratings is
stable. Capital Intelligence stated that the upgrade reflects the increasing strength
and flexibility of the government’s balance sheet and Qatar’s external finances,
which in turn are underpinned by the sheer scale of hydrocarbon production
relative to the small size of the population and supported by the high level of energy
prices. CI further stated that the ratings also take into account the good progress
made in diversifying the economy and the expanding role of the private sector.
Table 2: Government Bonds Foreign Currency Outlook

Moody’s ratings for Qatar
Foreign Currency Domestic Currency Bonds and Notes Bank Deposits
Source: Moody’s. Aa2 Aa2 LT : Aa2 ST : P-1 LT : Aa2 ST : P-1 Stable
On July 24th, 2007 Moody’s upgraded the long-term foreign and domestic currency
government bond ratings and the country ceiling for long-term foreign currency
bank deposits to Aa2 from Aa3 (Table 2). Moody’s mentioned that the upgrade
reflects the significant ongoing strengthening of public and external finances.
Moody’s also noted the prudent use of oil and gas export receipts as compared
with previous oil booms. Earlier on May 24th, 2006 Moody’s had implemented
a new approach to its ratings wherein Qatar’s sovereign country ceilings were
upgraded to Aa2 from A1 and the long-term foreign and local currency ratings
were raised to Aa3 from A1.
Table 3: Foreign Currency Local Currency Outlook

Standard and Poor’s ratings
for Qatar Long-Term Short-Term Long-Term Short-Term
Source: Standard and Poor’s. AA- A-1+ AA- A-1+ Stable
On March 6th, 2007 Standard and Poor’s (S&P) raised the sovereign long-term
foreign and local currency ratings to AA- from A+, and the short-term ratings to
A-1+ from A+ (Table 3). The outlook on the ratings is stable. S&P mentioned in
accompanying statements that the ratings upgrade reflects the Qatar government’s
acceleration of reforms and Qatar’s strong financial performance.
Table 4: Sovereign Moody’s Standard and Poor’s Fitch Capital Intelligence

GCC Ratings long-term foreign
currency rating Bahrain A2 A A A
Kuwait Aa2 AA- AA AA-
Oman A2 A N/R A
Qatar Aa2 AA- N/R AA-

Source: Moody’s, Standard Saudi Arabia A1 AA- AA- AA-
and Poor’s, Fitch and Capital
Intelligence. UAE Aa2 N/R N/R AA-
Qatar economic review 5

Qatar’s Total Population Reached 1.60 Million in August 2009
1. Overview of the State of Qatar

1.1 Location, Area and Historical Background
Qatar is an independent state in the Southern Arabian Gulf surrounded by Saudi

Arabia, Bahrain, the United Arab Emirates and Iran. The country is situated midway
along the western coast of the Arabian Gulf between latitudes 24.27° - 26.10°
North and longitude 50.45° - 51.40° East.
Qatar’s area is 11,437 square kilometres, projecting northward about 160 kilometres
into the Gulf. The coastline is 563 kilometres long and bounds the country to the
west, north and east.
1.2 Population
The population of Qatar as per the 2004 census is 744,029 showing a 42.5%
increase from the 1997 census of 522,023 and translating into an average annual
increase of 5.3% during 1997-2004.
In December 2008, Qatar Statistics Authority announced the results of the new
population numbers as per the sample labour force survey conducted. According
to the 2008 survey, Qatar’s population reached 1,552,820 increasing by 108.7%
from the 2004 census of 744,029 (Table 1.1). As per the 2008 survey, 50.2% of
the total population resided in Doha, while 25.5% of the population resided in Al
Rayyan. The percentage of people residing in Doha has increased from 45.7% in
the 2004 census to 50.2% in the December 2008 survey.
Recent estimates from the Qatar Statistics Authority shows total population to
have reached 1,597,552 as at August 2009, with the Male population accounting
for 78% of the total population. The total population as at year-end 2008 was
1,552,820. The rapid increase in population over the last few years is attributed to
the strong performance of the economy, which has resulted in a large number of
projects coming online, thereby leading to the influx of professionals, service and
contracting sector staff and others.
Table 1.1: 2004 Census 2008 Survey

Geographical Distribution of
Population
Municipality Population % of Total Population % of Total
Doha 339,847 45.7% 779,645 50.2%
Al Rayyan 272,860 36.7% 395,887 25.5%
Al Khor 31,547 4.2% 180,893 11.7%
Al Wakra 31,441 4.2% 105,392 6.8%
Al Daayen 31,814 4.3% 40,791 2.6%
Note: As per Act of 2004 Qatar is Umm Slal 31,605 4.2% 40,516 2.6%
divided into 7 Municipalities, from
the earlier 10.
Al Shamal 4,915 0.7% 9,696 0.6%
Source: Qatar Statistics
Authority. Total 744,029 100% 1,552,820 100%

45% of the Total Population are Between Age Groups 25 -39
Population by Gender
The 2008 sample labour force survey of the population by gender shows that
males accounted for 77.5% of the total population (Table 1.2). This major gender
imbalance is due to the growing number of expatriates, especially single males.

Population by Gender
Population by Gender Population % of Total % of Total % of Total
Males 496,382 66.7% 1,203,363 77.5%
Females 247,647 33.3% 349,457 22.5%

Authority. Total 744,029 100.0% 1,552,820 100.0%
Population by Age Groups
The population between the Age Groups 20-44 reached the 1 million mark as
at year -end 2008, accounting for 66% of the total population. The population
between the Age Group 25-29 witnessed a growth of 168.7% to reach 292,648
compared to 109,125 in the 2006 survey (Table 1.3). The population between the
Age Group 20-24 increased by 141.6% to reach 197,720 compared to 81,828
in the 2006 survey. The percentage of population below 20 years is 17.6%,
numbering 272,626.
Table 1.3: Age Group 2004 Census 2006 Survey 2008 Survey
Population by Age Groups and
Gender (2008 Survey)
0-14 167,618 168,245 212,081
15-19 42,191 45,071 60,545
20-24 59,567 81,828 197,720
25-29 84,053 109,125 292,648
30-34 94,809 108,854 217,625
35-39 85,397 95,028 186,225
40-44 75,877 82,762 132,322
45-49 59,119 63,786 108,417
50-54 37,353 41,667 77,291
55-59 19,875 20,407 38,058
60+ 18,170 17,981 29,888

Authority. Total 744,029 834,754 1,552,820

Total Economically Active Population reached 1.2 Million as at Year-End 2008
Economically Active Population by Gender

and Employment Status
The economically active population increased by a substantial 167.0% as per the 2008
Survey to reach 1,168,081 compared to the 2004 Census of 437,561 (Table 1.4).
The male population accounted for 89.5% of the total economically active population,
while females accounted for 10.5% as per the 2008 Survey.

Economically Active Population
by Gender and Employment
Status Males Females Total Males Females Total
Employer 2,932 61 2,993 2,300 46 2,346
Own Account 2,042 22 2,064 1,249 0 1,249
Employee 368,129 64,375 432,504 1,041,719 122,767 1,164,486

Authority.
Total 373,103 64,458 437,561 1,045,268 122,813 1,168,081
Economically Active Population by Economic Activity
There has been a rapid growth in the economically active population in all major
economic sectors, with the most noticeable segment being the construction
sector which accounts for 46.6% of the total economically active population. The
economically active population in the construction sector grew by 365% as per the
2008 Survey to reach 544,644 compared to the 2004 Census of 117,049 (Table 1.5).
The wholesale and retail trade forms the second largest economic actvity category,
accounting for 9.1% of the total economically active population.
Table 1.5: Economic Activity 2004 Census 2008 Survey

Economically Active Population
by Economic Activity
Agriculture, Hunting & Forestry 10,200 14,192
Fishing 1,825 3,638
Mining and Quarrying 17,997 60,100
Manufacturing 40,039 87,377
Electricity and Gas 4,364 7,643
Construction 117,049 544,644
Wholesale and Retail Trade 54,438 106,151
Hotels and Restaurants 10,280 23,992
Transport, Communication & Storage 15,218 53,465
Financial Intermediation 4,766 10,275
Real Estate, Renting and Related Activities 11,859 41,138
Public Administration 53,438 58,380
Education 19,877 31,679
Health and Social Work 11,554 28,505
Other Community Social Services 10,130 15,930
Domestic Services 53,356 79,007
Extra-territorial Organizations and Bodies 1,171 1,965

Authority. Total 437,561 1,168,081

Qatar-Bahrain Causeway to be Completed in 2014
1.3 Constitution and Legal System
The National Constitution Committee, established by an Emiri decree in July 1999

to draft a new permanent constitution, presented a final draft to HH the Emir in July
2002. One of the main provisions in the new constitution is the establishment of an
elected parliament. The draft constitution received an overwhelming majority vote
in the referendum held in April 2003, and became effective in June 2005.
The Judiciary in Qatar was expressly established as an independent body by the

provisional constitution and was formerly divided into two court systems; the Civil,
Commercial and Criminal system and the Shari’a Court system which administers
Islamic laws.
The Civil and Commercial system was formerly divided into the Minor and Major
courts. The Minor court had jurisdiction to consider only disputes not exceeding
QR30,000 presided by a single judge. All civil and commercial disputes in excess
of that value were heard by the Major courts, comprised of a panel of three judges.
Appeals from the Minor courts were raised to the Major courts, and from the Major
courts to the Court of Appeal, which is the highest court of appeal in the country.
In October 2004, the judicial system underwent a radical change with the
establishment of the new Judiciary Law issued in 2003, which became effective
in 2004. According to the new Judiciary Law, the previous two-court system has
merged into one. A Higher Court called the Court of Cassation (Supreme Court)
has been established. Appeals from the Court of Appeal can be raised to the Court
of Cassation, which will be considered the highest court of appeal in the country.
1.4 Foreign Relations and International Organizations
Qatar is a member of the Gulf Cooperation Council (GCC), whose other members
are Bahrain, Kuwait, Oman, Saudi Arabia and the United Arab Emirates. Qatar is a
member of the United Nations and currently holds a non-permanent member seat
at the Security Council, and is also a member of the Organization of Petroleum
Exporting Countries (OPEC), and other international and multilateral organizations
such as the International Monetary Fund, the International Bank for Reconstruction
and Development and the World Trade Organization.
During the GCC summit held in December 2001, the supreme council of the GCC
approved the establishment of a GCC customs union by 1st January 2003, which
is currently in place. This agreement has accelerated the proposed customs union
by two years, setting unified customs tariffs at 5% for all imported goods into the
region.
Qatar and Bahrain signed a Memorandum of Understanding (MOU) in February

2005 for the setting up of a causeway between the two countries. The construction
of the estimated $3 billion 40 kilometre causeway between the two countries is
expected to start in the first quarter of 2010, and will also include a railway link
between the two countries. The causeway is expected to be completed by the
middle of 2014 and will have a great impact in further enhancing bilateral ties.

Qatar’s Nominal GDP Growth witnessed a High of 40.9% in 2008
2. The Economy of Qatar

Qatar’s economy reached a significant milestone in 2008 with the Gas sector overtaking
oil as the largest contributor to the economy, accounting for 30.8% of overall Gross
Domestic Product (GDP), according to data released by the Qatar Statistics Authority.
The Gas sector contributed QR112.6 billion to overall GDP, while the oil sector
contributed QR100.2 billion (Table 2.1). Qatar’s nominal GDP growth reached a high
of 40.9% in 2008, supported by the successful economic diversification into gas,
which will be a key economic growth driver in the coming years.
The oil and gas sector accounted for 60.8% of overall GDP in 2008, with the
non-oil and gas sector accounting for 39.2%. However, the non-oil and gas
sector has been witnessing impressive growth in recent years, with a growth
of 26.9% in 2008, a growth of 27.6% in 2007 and a growth of 41.6% in 2006.
In the coming years, the non-oil and gas sector will continue to grow and
contribute significantly to the overall GDP, as major initiatives (Qatar Financial
Centre, Education City, Qatar Science and Technology Park, Energy City Qatar,
Tourism, Construction and Real Estate, Sports, Conferences etc.) continue to
diversify the economy. Qatar’s rapid economic growth has seen it reach the top
ranks of wealthiest countries in the world, as measured by GDP per capita. In
2008, Qatar’s GDP per capita reached a record level of $64,661.
2.1 Gross Domestic Product (GDP)
Qatar’s nominal GDP growth moves from strength to strength averaging an

astonishing 33.7% over the past five years (2004 - 2008). The main drivers for
this rapid growth comes from the ongoing increase in production and exports of
LNG, oil, petrochemicals and related industries, coupled with high product prices.
The non-oil and gas sector has also witnessed significant growth in recent years,
averaging 32.9% over the past five years (2004 - 2008).
For the first quarter of 2009, preliminary data from the Qatar Statistics Authority
shows GDP declining by 17.5% to QR70.9 billion, from QR85.9 billion during the first
quarter of 2008 (Table 2.1). During the first quarter of 2009, the oil and gas sector
witnessed a decline by 41.4%, while the non-oil and gas sector grew by 19.9%.
Table 2.1: (QR Million) 2006 2007 2008 QI 2008 QI 2009*

Gross Domestic Product at
Current Prices by Economic
1. Oil & Gas Sector 118,168 146,475 222,127 52,345 30,662
Sectors (2006 - QI 2009) % Change 28.3% 24.0% 51.6% - -41.4%
- Gas N/A 61,936 112,612 25,661 17,401
- Oil N/A 80,374 100,165 24,862 11,439
- Services incidental to Oil and Gas N/A 4,165 9,350 1,822 1,822
2. Non-Oil & Gas Sector 88,476 112,936 143,356 33,532 40,221
% Change 41.6% 27.6% 26.9% - 19.9%
- Agriculture & Fishing 233 250 268 65 67
- Manufacturing 16,150 19,179 25,390 4,902 4,009
- Electricity & Water 3,513 4,329 5,456 1,305 1,469
- Building & Construction 11,991 14,634 18,166 4,182 5,047
- Trade, Restaurants and Hotels 9,452 12,002 13,311 3,081 3,368
- Transport and Communications 7,159 9,803 12,274 2,509 3,007
* Preliminary. - Finance, Insurance & Real Estate 21,392 31,865 37,019 7,639 10,389
** Includes social services, - Other Services** 18,586 20,874 31,472 9,849 12,865
imputed bank service charges,
government services, household Total GDP 206,644 259,411 365,483 85,877 70,883
services and import duties. % Change 33.7% 25.5% 40.9% - -17.5%
Source: Qatar Statistics Total GDP ($ Million) 56,770 71,267 100,407 23,593 19,473
Authority.
GDP per capita ($) 54,496 58,120 64,661 - -

QNB Capital Forecasts Qatar’s Nominal GDP to Contract by 5.0% in 2009 and
Grow by 31.0% in 2010
300 292
Figure 2.1:
GDP Growth Rate (%) 50%
275
40.9% 250
40%
Figure 2.2:
Oil & Gas GDP / Non-Oil & Gas 225 222
33.7%
GDP (QR Billion) 30%
31.0%
200 202
25.5%
20% 175
162
150 146 145
10% 143
125 119
100 113
0%
* QNB Capital Forecasts. 88
75
-10% -5.0%
Source: Qatar Statistics 2006 2007 2008 2009* 2010*
2006 2007 2008 2009* 2010*
Authority and QNB Capital.
Oil & Gas GDP Non-Oil & Gas GDP
For 2008, data from the Qatar Statistics Authority shows nominal GDP growth at
40.9%. The following were the main factors behind this growth:
• The price of Qatari crude oil increased by 36.0% in 2008 to reach $95.2 p/b,
compared to $70.0 p/b in 2007 according to figures obtained from the Middle
East Economic Survey (MEES).
• Qatar’s crude oil production averaged 837,000 bpd in 2008, compared to
819,000 bpd in 2007, according to MEES.
• LNG exports increased by 10.9% to reach 30.4 million tons, from 27.4 million
tons in 2007.
• Higher oil and gas prices and production resulted in the Oil & Gas sector GDP
showing an increase of 56.8% in 2008 to reach QR229.7 billion, compared to
QR146.5 billion in 2007.
• The Non-Oil and Gas sector GDP grew by 27.2% in 2008 to reach QR142.7 billion,
compared to QR112.1 billion in 2007.
For 2009, QNB Capital forecasts nominal GDP to witness a contraction by 5.0%,
mainly due to the following factors:
• The price of Qatar’s crude oil is expected to average $55p/b in 2009, from
95.2 p/b in 2008.
• Qatar’s crude oil production is expected to drop by 37,000 bpd to average
800,000 bpd in 2009, due to quota restictions put in place by OPEC.
• Non-Oil and Gas GDP is expected to grow only by 1.1% to reach QR145.0 billion.
However, the strong growth in the Gas sector with LNG exports set to reach
44.0 million tons in 2009, from 30.4 million tons in 2008, will ensure an underlying
strength and support to the economy.
Table 2.2: (QR Million) 2008* 2009** 2010**

Gross Domestic Product
(2008 - 2010)
Nominal Oil and Gas GDP 222,127 202,138 292,297
% Growth 51.6% -9.0% 44.6%
* Preliminary
Nominal Non-Oil and Gas GDP 143,356 145,000 162,400
** QNB Capital Forecasts
*** QNB Capital, IIF & EIU % Growth 26.9% 1.1% 12.0%
Forecasts.
Total Nominal GDP 365,483 347,138 454,697
Authority and QNB Capital.
% Real GDP Growth*** 13.5% 6.0% 18.5%

Qatar’s Non-Oil & Gas Sector Contributed 39.2% of Total GDP in 2008
The Non-Oil and Gas Sector
The Non-Oil & Gas sector contributed 39.2% of total GDP in 2008, recording
a growth of 26.9% over 2007. The main components of this sector are the
following:
a. Finance, Insurance and Real Estate

In 2008, the Finance, Insurance and Real Estate sector made the largest
contribution to GDP among the non-oil and gas sectors. This sector is
comprised of five sub-sectors: banking, insurance, financial intermediation
services, real estate and business services. In terms of relative contribution to
GDP, this sector contributed QR37,019 million, and grew by 16.2% at current
prices in 2008. This sector represented 10.1% of Qatar’s GDP in 2008.
b. Other Services
In 2008, the Other Services sector, which includes government services,
social services, household services, imputed bank service charges and import
tariffs, made the second largest contribution to GDP of the non-oil and gas
sectors. This sector grew by 50.8% in 2008, contributing QR31,472 million,
which represented 8.6% of total GDP.
c. Manufacturing Industry
The Manufacturing sector made the third largest contribution to GDP among
non-oil and gas sectors in 2008. This sector grew by 32.4% at current prices,
contributing QR25,390 million, which represented 6.9% of total GDP. This
sector is strongly supported by the Government as a part of a general policy
to diversify income sources and to maximise the utilisation of Qatar’s natural
resources.
The major sub-sectors of the Manufacturing sector are petroleum refining,

industrial, petrochemicals, fertilisers and steel, which utilise natural gas as
feed-stock and/or fuel. Other important activities include the production
of flour, cement, concrete, plastics, textiles and footwear, household
articles and paint.
d. Building and Construction

The rapid pace of developments in the Building and Construction sector is
quite evident around Doha in recent years, and as such this sector continues
to be a major contributor to the GDP and employment of labour force. This
sector witnessed a growth of 24.1% in 2008, contributing QR18,166 million
to overall GDP. Credit facilities extended by commercial banks to the land,
housing and construction sector increased by 60.0% during the year 2008 to
reach QR44,733 million, compared to QR27,967 million in 2007.
Public expenditure is a very important factor affecting the prospects for the
building and construction sector, and the realisation of budgetary surpluses
in the last seven fiscal years has increased the level of public spending.
Allocation for major public projects in the 2009/10 Budget was at QR37.9
billion, which covers the areas of public services, infrastructure, social and
health services, education and youth welfare.
e. Trade, Restaurants and Hotels

The Trade, Restaurants and Hotels sector contributed QR13,311 million to
Qatar’s overall GDP in 2008, representing 3.6% of total GDP. This sector
grew by 10.9% in 2008 and will be one of the most promising in the coming
years, as business, cultural, sports, education and tourism events aimed
at promoting Qatar, gather even more momentum. Qatar’s hotel room
capacity (3-5 Star Hotels) is expected to increase by an additional 13,624
rooms in the coming years as a result of up-coming projects such as

Qatar’s Electricity Generation Capacity to Exceed 9,000 MW by 2012
The Pearl-Qatar’s - Four Seasons, the Qatar Airways Hotel, the Hilton
Doha, the Shangri-La, Swiss-Belhotel Doha, the Marriott Courtyard and
the Rotana amongst others. The Qatar Tourism Authority which was
established in the year 2000, is actively promoting Qatar as a tourist
destination.
f. Transport and Communications

This sector contributed QR12,274 million to the overall GDP in 2008, and
witnessed a growth of 25.2%. Qatar Airways is the principal airline operating
from Qatar, designated as the “National Carrier”, and is a joint public and
private sector enterprise (being 50% owned by the Government). Qatar
Airways currently flies to over 84 destinations in the Middle East, North
Africa, Europe, North America, the Indian sub-continent and the Far East.
Qatar Airways currently operates a fleet of 68 aircraft, comprising of 8 Boeing
aircraft and 60 Airbus aircraft. Qatar Airways will increase its fleet to 110 by
2013.
The Supreme Council for Information and Communications Technology

(ictQatar) is the telecommunications regulating authority in Qatar as per Law
No. (34) of 2006. Prior to the new law, Qatar Telecom (Q-Tel) under licence
was the sole owner and operator of all national and international services.
With the opening up of the telecom sector in early 2007, a new mobile
operating licence has been issued to Vodafone Qatar, who has successfully
started full mobile operations in July 2009. As at the end of the first quarter
of 2009, Qatar had a mobile subcriber base of over 1.8 million.
g. Electricity and Water

The Electricity and Water sector witnessed a growth of 26.0% in 2008,
contributing QR5,456 million to Qatar’s overall GDP. Most of Qatar’s electricity
generation capacity comprises of gas turbines, which are fuelled by natural
gas. Water desalination is achieved in tandem with electricity generation.
Qatar currently has an electricity generation capacity of 3,888 MW and a
water generation capacity of 205 million gallons per day.
A number of industrial companies, such as QAPCO and QAFCO, have their

own electricity generating facilities. Qatar’s first independent water and
power project (IWPP) located at Ras Laffan has a capacity of 750 MW of
power and 40 million gallons of water a day. The Ras Laffan B IWPP was
commissioned in March 2008 and has a capacity of 1,025 MW of power
and 60 million gallons of water a day. The Independent Power Project - 2,
located at Mesaieed is currently under construction and will add another
2,007 MW of power to Qatar’s grid, when completed during the last quarter
of 2009. Qatar’s power generation capacity will exceed 9,000 MW in the
coming three years with new plants in Mesaieed and Ras Abu Fontas, while
the water generation capacity is set to touch 400 million gallons per day.
h. Agriculture and Fisheries

The Agriculture and Fishing sector has traditionally played only a minor role in
the modern Qatari economy because of unsuitable weather and environmental
conditions. Cultivable land accounts for only approximately 0.7% of Qatar’s
total surface area. This sector grew by 7.2% in 2008, contributing QR268
million to Qatar’s GDP.

Qatar Petroleum’s New Five-Year Plan (2009 - 2013) Budget’s an Overall
QR146 Billion for Projects
3. Key Economic Sectors

3.1 The Oil Sector
The State of Qatar conducts its principal oil operations through State-owned Qatar
Petroleum (QP), which manages Qatar’s oil, gas, fertiliser, petrochemicals and
refining enterprises in Qatar and abroad.
The Government’s oil policy has the twin aim of replenishing proven reserves
within currently producing fields and identifying additional new reserves. Qatar’s
oil reserves as at December 2008 stood at 25.9 billion barrels (Table 3.1). Qatar’s
oil reserves have substantially risen since 1999 when it was at 3.7 billion barrels,
to 25.9 billion barrels as at December 2008. Given an average production of
801,000 barrels per day (bpd) over the past five years, proven reserves would last
approximately 89 years.
Table 3.1: (Billion barrels) Dec. 2008

Qatar - Proven Oil Reserves
Crude Oil 3.2
Condensates 22.7
Source: Qatar Petroleum. Total 25.9
QP has in its new five-year plan (2009 - 2013), budgeted an overall

QR145.9 billion for projects in crude oil, natural gas, gas-to-liquids, refining,
petrochemicals, industrial cities and others (Table 3.2).
Table 3.2: Projects QR Billion

QP Five-Year Plan (2009 - 2013)
Crude Oil 33.4
Natural Gas 61.8
GTL & Refining 15.9
Petrochemicals 16.1
Industrial Cities and Others 18.7

Source: Qatar Petroleum. Total 145.9
QP has embarked upon an investment programme with the intention of expanding

oil production from its onshore and offshore fields from the current 844,000 bpd,
to around 1,055,000 bpd by year-end 2010 (Table 3.3).
Table 3.3: Current Production Projected Production

Field (bpd) Operator
Qatar’s Current Crude Oil Dec. 2008 Dec. 2010
Production and Projected
Dukhan QP 256,000 256,000
Bul Hanine QP 49,000 37,000
Maydan Mahzam QP 36,300 27,000
Idd Al-Shargi North Dome Occidental 109,000 115,000
Idd Al-Shargi South Dome Occidental 4,100 19,000
Al-Shaheen Maersk Oil 330,000 525,000
Al-Khalij TotalFinaElf 37,500 45,000
Al-Rayyan Occidental 8,600 10,000
Al-Karkara QPD 6,200 8,000
El-Bunduq BOC 7,300 13,000

Source: Qatar Petroleum. Total 844,000 1,055,000

Al Shaheen Field is Currently Qatar’s Highest Yielding with a Production
Capacity of 330,000 bpd
QP Production
QP produces oil on its own account from one onshore and two offshore fields
and from other fields through Exploration/Development and Production Sharing
Agreements (EPSAs/DPSAs) with major international partners (Figure 3.1).
QP operates exclusively the Dukhan Field, which is Qatar’s oldest field with
a current production capacity of 256,000 bpd. The field comprises of three
reservoirs for crude oil and one reservoir for non-associated gas. The Dukhan
Field is Qatar’s only onshore field and has estimated reserves in excess of 2 billion
barrels of oil, equivalent to around 22 years’ production at present production
levels. QP also produces offshore crude oil for its own account from two fields
within Qatar’s territorial waters: Maydan Mahzam and Bul Hanine, which currently
have production capacities of 36,300 bpd and 49,000 bpd. QP’s oil production
accounted for 41% of Qatar’s total oil production as at December 2008.
Exploration/Development and Production Sharing Agreements

(EPSAs/DPSAs)
Qatar’s total oil exploration area is divided into twenty two hydrocarbon “blocks”
covering a total surface area of 43,426 square kilometres. Since the early 1990s,
QP has entered into a number of EPSAs/DPSAs. Under an EPSA agreement
the contractor is granted the right to explore for oil in the relevant block and, if oil
is discovered, to develop the fields. Under a DPSA agreement the contractor is
required to cover appraisal and development of already discovered structures or
further development of existing fields. Key aspects of major EPSAs/DPSAs include
the following ventures:
Idd Al Shargi (Offshore)
Occidental Petroleum has been exploring, operating and developing both the
North Dome of this field since 1994 when it signed a DPSA with QP, and the South
Dome since December, 1997 following a separate DPSA. Occidental aims to
increase production of Idd Al Shargi Field (for both North and South Domes) from
the current production of 113,100 bpd, to 134,000 bpd by 2010.
Al Shaheen Field - Block 5 (Offshore)
Al Shaheen is currently Qatar’s highest yielding field with a production capacity

of 330,000 bpd. The development of this field is based on extensive use
of horizontal drilling and water injection, applying state-of-the-art technology
developed by Maersk Oil. QP signed a deal with Maersk Oil Qatar in early
2001, which increased the production capacity to the current level. QP and
Maersk further in April 2004 signed an EPSA for an extention area of Block 5,
located Northwest of the Al Shaheen Field. Further to this, a new estimated
$5 billion development plan was signed in March 2006 which involves the
drilling of an additional 160 wells and raise production levels to 525,000 bpd
by year-end 2010.
Al Khalij Field - Block 6 (Offshore)
TotalFinaElf Qatar operates this field under a DPSA with QP. Production at this
field stood at 37,500 bpd as at year-end 2008.
Al Rayyan Field (Offshore)
Occidental Petroleum currently operates the field with a 92.5% stake, along with
Marubeni Corporation with a 7.5% stake. BP was the field operator until June
2002, after which Anadarko acquired its stake in Blocks 11,12 & 13, and in 2007
it was acquired by Occidental Petroleum. Production from this field is currently at
8,600 bpd.

Block 4 was Awarded to Occidental Petroleum while Blocks 4 North and 14
were Awarded to Wintershall during the Last Quarter of 2008
Al Karkara Field (Offshore)
Qatar Petroleum Development Company (QPD) operates the field under a DPSA
signed with QP in 2003. QPD is a Japanese consortium (Cosmo Oil Co., Nissho
Iwai Corp., and United Petrleum Development Co.). Production at this field started
in the first quarter of 2006 and is currently at 6,200 bpd.
Blocks 1, 4, 4N, 7, 8 and 14 (Offshore/Onshore)
Block 14 was awarded to Wintershall in the last quarter of 2008. Block 4 was
awarded to Occidental Petroleum in the last quarter of 2008, while Block 4 North
was awarded to Wintershall. Block 1 is likely to go for bidding in 2010, while Block
7 and Block 8 are expected to go for bidding in 2011.
Block 2 (Onshore)
In March 1998, QP and ChevronTexaco signed an EPSA for the onshore Block 2
oil concession, which covers an area of approximately 10,900 square kilometres. In
2001, Canadian firm EnCana and Swedish firm Svenska acquired a stake in Block
2 from ChevronTexaco and now the block is operated through a consortium.
Figure 3.1:
Qatar’s Oil and Gas Areas
Situation Map
Source: Qatar Petroleum.

Qatar’s Oil Production Averaged 797,000 bpd during the First Half of 2009 while
Oil Prices Averaged $52.4 p/b
Oil Production, Price and Exports:
Qatar’s oil production averaged 797,000 bpd during the first half of 2009. Qatar’s
oil production increased by 2.2% in 2008 to average 837,000 bpd, compared to
819,000 bpd in 2007 (Figure 3.2). Qatar’s oil production increased marginally
in 2007 to average 819,000 bpd, compared to 810,000 bpd in 2006. Qatar’s
oil production has increased by 17.2% since 2003 when production averaged
714,000 bpd, to an average production of 837,000 bpd in 2008, according to
figures obtained from Middle East Economic Survey (MEES).
Qatar’s oil prices averaged $52.4 p/b during the first half of 2009. Qatar’s oil
price increased by 36.0% in 2008 to average $95.2 p/b in 2008, compared to an
average of $70.0 p/b in 2007 (Figure 3.3). Qatar’s oil price has more than trebled
to average $95.2 p/b in 2008, compared to an average of $27.9 p/b in the year
2003 , according to MEES. Qatar’s crude oil price increased by 11.3% in 2007 to
average $70.0 p/b in 2007, compared to $62.9 p/b in 2006. Qatar’s oil prices are
based on the average of a basket of two crudes, mainly Dukhan and Marine.
880 100
95.2
837
Figure 3.2: 90
Qatar’s crude oil production 819 80

(000 bpd) 810 70 70.0
810 797
779 65
62.9
Figure 3.3: 60
Qatar’s crude oil price ($ p/b) 55
740
51.7 52.4
50
45
40
670
35.2
35
30
25
Source: Middle East Economic 600
20
Survey. 2004 2005 2006 2007 2008 Jan - Jun
2009 2004 2005 2006 2007 2008 Jan - Jun 2009
Qatar’s crude oil exports are directed mainly towards the Asian markets, with
the region accounting for 90.0% of the total oil exports in 2008. In 2008, Japan
received 54.0% of Qatar’s total oil exports, followed by Singapore with 16.0%,
South Korea with 9.0%, Thailand with 7.0%, Taiwan with 2.0%, and India with
2.0% (Table 3.4).
Table 3.4: Country % Share

Destination of Qatar’s Crude Oil
Exports (2008)
Japan 54.0%
Singapore 16.0%
South Korea 9.0%
Thailand 7.0%
Taiwan 2.0%
India 2.0%
Other Countries 10.0%

Source: Qatar Petroleum.
Total 100.0%

Qatar’s Natural Gas Reserves of Over 902 tcf will Support Production for Over
200 Years
3.2 The Natural Gas Sector
Qatar’s North Gas Field, discovered in 1971, is the largest non-associated gas field
in the world, with proven reserves currently estimated at over 902 trillion cubic feet
(tcf), which is equivalent to about 162 billion barrels of oil. These reserves would
translate into 14.4% of the world total and will be sufficient to support planned
production of natural gas for over 200 years. The North Field extends over an area
of approximately 6,000 square kilometres, predominantly underlying the territorial
waters of the State of Qatar (Figure 3.1). Associated gas reserves are currently
estimated at 11 tcf. Within the Middle East, Qatar has the second highest proven
gas reserves after Iran.
QP has initiated and developed two major LNG projects with foreign shareholders
for the purpose of utilising the North Field gas for exports in the form of LNG. These
projects are Qatargas and RasGas which currently operate LNG facilities with
a combined production capacity of around 38.6 million tons per annum (mtpa).
These facilities are undergoing major expansions to meet additional LNG export
opportunities. Sales and Purchase Agreements (SPA) have been reached with a
number of countries, which at their peak in 2011 will reach 76.4 mtpa (Table 3.5).
The Qatar Gas Transport Company (Nakilat) was established as a QE listed company
in early 2005, to meet the transportation needs of the various LNG export deals. QP
has allocated QR61.7 billion in its five-year plan, starting 2009, to meet the rapidly
expanding needs of the Natural Gas sector.
Table 3.5: Destination

Qatar’s Contracted LNG Exports 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
(mtpa) (Supplier)
Sales & Purchase Agreements

SPA’s with 8 Japanese
1
Companies. Japan1 (Qatargas 1) 6.3 6.3 6.3 6.3 6.4 6.6 6.6 6.6 6.6 6.7 6.7
2
SPA with KOGAS of Korea.
Korea2 (RasGas) 4.9 4.9 6.8 8.8 8.8 8.8 8.7 7.0 7.0 7.0 7.0
3
SPA with Petronet of India.
India (RasGas II)
3
- - 2.5 3.8 5.0 5.0 5.0 5.6 7.5 7.5 7.5
4
SPA with Edison Gas of Italy.
Italy (RasGas II)
4
- - - - - - - 4.7 4.7 4.7 4.7
5
SPA with Gas Natural Group
of Spain.
Spain (Qatargas 1)
5
1.2 1.1 1.3 2.2 2.6 2.9 2.9 2.9 2.9 2.9 2.1
6
SPA with BP.
Spain (Qatargas 1)
6
- 0.1 0.8 0.7 0.5 - - - - - -
7
SPA with Endesa Generacion
SA of Spain. Spain (RasGas II)
7
- - - 0.6 0.8 0.8 0.8 0.8 0.8 0.8 0.8
SPA with Fluxys LNG of
8
Belgium (RasGas II)
8
- - - - - 2.6 3.4 3.4 3.4 3.4 3.4
Belgium.
9
SPA with Distrigas of Belgium. Belgium (RasGas II)
9
- - - - - - 2.1 2.1 2.1 2.1 2.1
SPA with Chinese Petroleum

10
Taiwan (RasGas II)
10
- - - - - - 1.2 2.5 3.0 3.0 3.0
Corporation.
UK (Qatargas II)
11
- - - - - - - 4.0 7.6 7.6 8.0
11
SPA with ExxonMobil.
12
SPA with Total/ExxonMobil. France/UK/USA (Qatargas II)
12
- - - - - - - 3.0 7.6 7.6 8.0
13
SPA with ConocoPhilips. USA (Qatargas 3)
13
- - - - - - - - 7.6 7.7 7.7
14
SPA with ExxonMobil. USA (RasGas 3)
14
- - - - - - - 2.1 7.7 9.2 9.2
15
SPA with Shell.
USA 15
(Qatargas 4) - - - - - - - - 1.8 5.3 5.3
16
SPA with Marubeni.
Japan16 (Qatargas 4) - - - - - - - - - 0.9 0.9
Source: Qatargas, RasGas, and
QNB Capital. Grand Total 12.4 12.4 18.1 23.1 24.8 27.4 30.7 44.7 70.3 76.4 76.4

Qatargas Contracted LNG Exports to Reach 38.7 mtpa by 2011
Qatar’s LNG Projects
1. Qatar Liquefied Natural Gas Company (Qatargas)
Qatargas was established in 1984, with the first sales agreement being signed
in 1992. The main activities of Qatargas are divided into two main projects with
separate shareholder groups: the upstream joint venture (offshore production and
the onshore receiving facilities) and the downstream joint venture (onshore LNG
Plant).
The Qatargas upstream joint venture has equity held by QP (65%) and four major
energy and trading companies, TotalFinaElf (20%), ExxonMobil (10%), Mitsui (2.5%)
and Marubeni (2.5%). The Qatargas downstream joint venture has equity held by
QP (65%), TotalFinaElf (10%), ExxonMobil (10%), Mitsui (7.5%) and Marubeni
(7.5%).
The first output from the plant in the form of condensate was shipped to Japan in
October 1996, with the first LNG shipment to Chubu Electric Power following in
December of the same year. The production capacity of Qatargas’ existing three
trains are 10.2 mtpa, whose output is destined to Japan (Chubu Electric Power
and seven other Japanese customers).
In 2008, Qatargas exported a total of 9.7 million tons (mt) of LNG, with contracted
exports reach 38.7 million tons by 2011 (Table 3.6). Qatargas produced 10.1 mt of
LNG and around 21,500 bpd of condensates in 2008.
Table 3.6: (In million tons per annum) 2004 2005 2006 2007 2008
(a) Qatargas Actual LNG Exports
(b) Qatargas Anticipated LNG Actual (SPA’s and Spot) 8.9 9.9 9.5 9.4 9.7
Exports
(In million tons per annum) 2009 2010 2011 2012

Source: Qatargas, QP and QNB
Capital. Contracted (SPA’s) 16.5 34.1 38.7 38.7
Japan is the main importer of Qatargas’ LNG and in 2008 imported 6.9 million
tons, followed by Spain with 2.7 mt (Table 3.7).
Table 3.7: Destination Country 2004 2005 2006 2007 2008

Qatargas’ LNG Exports (mtpa)
Japan 6.8 6.2 6.4 6.4 6.9
Spain 2.0 2.9 2.6 2.7 2.7
USA - - 0.4 - -
Others 0.1 0.8 0.1 0.3 0.1

Source: Qatargas and QP.
Total 8.9 9.9 9.5 9.4 9.7
Qatargas has completed its debottlenecking process which began in 2001,

and current production capacity of its three existing trains has increased from
6.6 mtpa to 10.2 mtpa in 2006. The debottlenecking project was completed by
a joint venture partnership between Chiyoda Corporation of Japan and Technip of
France.

RasGas Contracted LNG Exports to Reach 37.7 mtpa by 2011
2. Qatar Liquefied Natural Gas Company 2 (Qatargas 2)
In June 2002, QP and ExxonMobil announced the setting up of a joint venture,

provisionally referred to as Qatargas 2, with the primary aim of supplying up to
14 mtpa of LNG to the UK market. Project costs are estimated at $12.8 billion.
QP has a 70% equity stake in the venture, with ExxonMobil holding the balance of
30%. Qatargas 2 was set up as part of Qatargas’ expansionary plans to add trains
4 and 5. The two new super-trains will each have a capacity as large as 7.7 mtpa,
with train 4 having started production in March 2009 and train 5 to commence
production in the second half of 2009.
In December 2004, the EPC contract for trains 4 and 5 was awarded to a joint
venture of France’s Technip and Japan’s Chiyoda. In March 2005, France’s Total
acquired a 16.7% equity stake in train 5, with an investment plan estimated at
$3.5 billion. Train 5 will also have QP as a 65% equity stakeholder and ExxonMobil
holding the remaining 18.3%. A $550 million loan syndication consisting of
18 banks was signed in June 2005 for trains 4 and 5.
In July 2003, QP and ConocoPhillips signed a Heads of Agreement for a joint venture
project to construct train 6, referred to as Qatargas 3. The agreement outlines
that the project will have an ownership structure of QP (70%) and ConocoPhillips
(30%). The Qatargas 3 project envisages the construction of an LNG train with a
capacity of around 7.7 mtpa, scheduled for completion by 2010, with the output
mainly destined for the US market.
In February 2005, QP and Shell signed a Heads of Agreement to launch Qatargas

4. The Qatargas 4 project involves the construction of a 7.7 mtpa LNG train,
scheduled for completion in 2011, with exports destined for North America and
Europe. The Qatargas 4 joint venture will have QP holding a 70% equity stake,
with Shell holding the remaining 30%. In April 2007, a Heads of Agreement was
signed with Marubeni Corporation for the supply of 0.9 mtpa of LNG to Japan, with
the option for Marubeni to take a stake in train 7.
5. Ras Laffan Liquefied Natural Gas Company (RasGas)
RasGas was established in 1993 as a $3.3 billion grassroots LNG and related
products venture, owned by QP (63%), ExxonMobil (25%), Koras (5%), Itochu
Corporation (4%), and LNG Japan Corporation (3%).
Production from RasGas’ first and second LNG trains began in June 1999 and
April 2000 respectively. Each of the first two trains has a capacity of just over
3.3 mtpa.
RasGas began producing field condensates in April 1999, with an initial production
volume of around 15,000 bpd, and current capacity of around 45,000 bpd for
combined plant and field production from the two trains. RasGas also has
a production capacity for solid sulfur of about 300 tons per day.
LNG production from RasGas companies reached 20.7 mt in 2008, compared

to 20.1 mt of LNG produced in 2006. RasGas companies currently has an LNG
production capacity of 20.7 mtpa. Contracted LNG exports are expected to reach
37.7 mt by the year 2011 (Table 3.8).
Table 3.8: (In million tons per annum) 2004 2005 2006 2007 2008
(a) RasGas Actual LNG Exports
(b) RasGas Anticipated LNG Actual (SPA’s and Spot) 9.5 12.3 15.6 18.0 20.7
Exports
Source: RasGas, QP and QNB (In million tons per annum) 2009 2010 2011 2012
Capital.
Contracted (SPA’s) 28.2 36.2 37.7 37.7

Qatar Emerged as the World’s Biggest LNG Exporter in 2008 with 30.4 Million
Tons Going to Customers in the Far East, Europe and US
In 2008, RasGas group of companies exported 20.7 mt of LNG, compared to

18.0 mt of LNG exported in 2007 (Table 3.9). RasGas group of companies
exported 8.5 mt of LNG to South Korea, which accounted for 41% of total LNG
exports, followed by India which received 7.5 mt (36%).
Table 3.9: Destination Country 2004 2005 2006 2007 2008

RasGas LNG Exports (mtpa)
South Korea 5.9 6.2 6.7 8.2 8.5
India 2.0 4.5 5.0 6.2 7.5
Belgium - - - 1.7 2.2
Spain 1.2 0.8 1.1 0.8 0.8
Others 0.4 0.8 2.8 1.1 1.7

Source: RasGas and QNB
Capital. Total 9.5 12.3 15.6 18.0 20.7
6. Ras Laffan Liquefied Natural Gas Company 2 (RasGas 2)
RasGas 2 was formed primarily to execute the planned expansion of RasGas. An

Emiri decree issued on 26th March 2001 announced the setting up of Ras Laffan
LNG Company 2 (RasGas 2). The project involved the construction of three LNG
trains (Trains 3, 4 & 5), each having a capacity of 4.7 mtpa and was initially aimed at
providing Petronet of India with 7.5 mtpa of LNG. RasGas 2 was established with
a capital of $5 billion, owned by QP (70%) and ExxonMobil (30%).
Trains 3, 4 & 5 were constructed by a consortium consisting of Japan’s Chiyoda

Corporation, Mitsui, Italy’s Snamprogetti and Qatar’s Almana Group. Train 3
became operational in January 2004, while trains 4 & 5 became operational in
October 2005 and November 2006 respectively.
7. Ras Laffan Liquefied Natural Gas Company 3 (RasGas 3)
In July 2005, QP and ExxonMobil announced the incorporation of RasGas 3, a joint

venture company between QP (70%) and ExxonMobil (30%), with an authorised
capital of $8 billion. An agreement was reached for the supply of 15.6 mtpa of
LNG to the US, with deliveries set to start by 2010. Total project costs, including
ships and downstream developments are estimated at $14 billion. The project
envisages the construction of two LNG trains with a capacity of 7.7 mtpa each,
with train 6 set to be commissioned in the third quarter of 2009, while train 7 will
be commissioned during the second half of 2010. The onshore EPC contract for
the two LNG trains (6 & 7) were awarded in September 2005 to a joint venture of
Japanese firm Chiyoda Corporation and French firm Technip. The offshore EPC
contract was awarded to J Ray McDermott Middle East.
QP and ExxonMobil as mentioned earlier are also working together at arranging

the necessary transportation of the LNG to the US and thereafter at setting up
regasification facilities in the US.
November 2008 marked the 12th anniversary for Qatar as an LNG producer. LNG
production capacity was around 31.0 mt in 2008. Actual LNG production in 2008
was 30.8 mt, compared to 30.0 mt in 2007. With the various expansion projects
currently under way and expected in the coming years, production capacity will
increase to about 77.1 mtpa by 2011 (Table 3.10). Qatar has established itself as
the Gulf’s leading gas exporter, delivering since 1997 around 187 million tons of
LNG to customers in the Far East, Europe and the US. In 2008, Qatar exported
30.4 million tons of LNG.

Qatar’s LNG Production Capacity will Reach 77.1 mtpa by 2011
Table 3.10: Qatargas

LNG Summary (mtpa) Qatargas
Production Production Capacity Contracted Actual LNG
Year
Capacity Increase From LNG Exports Exports
1997 4.4 Trains 1 & 2 (Qatargas) 4.4 2.2
1998 6.6 Train 3 (Qatargas) 4.4 3.6
1999 6.6 -- 5.9 5.9
2000 6.6 -- 5.9 6.6
2001 7.5 Debottlenecking 6.0 7.5
2006 10.2 -- 9.0 9.5
2007 10.2 -- 9.5 9.4
2008 10.2 -- 9.5 9.7
2009 25.6 Trains 4 & 5 (Qatargas II) 16.5 --
2010 33.3 Train 6 (Qatargas 3) 34.1 --
Source: QP, Qatargas, and QNB 2011 41.0 Train 7 (Qatargas 4) 38.7 --
Capital.
2012 41.0 38.7 --
LNG Summary (mtpa) RasGas RasGas

Production Production Capacity Contracted Actual LNG
Year
Capacity Increase From LNG Exports Exports
1999 6.6 Trains 1 & 2 (RasGas) 0.6 0.7
2000 6.6 -- 3.3 3.9
2001 6.6 -- 4.2 5.3
2002 6.6 -- 4.9 6.0
2003 6.6 -- 5.0 6.4
2004 11.3 Train 3 (RasGas II) 10.5 9.5
2005 16.0 Train 4 (RasGas II) 14.6 12.3
2006 20.7 Train 5 (RasGas II) 15.8 15.6
2007 20.7 17.9 18.0
2008 20.7 21.2 20.7
2009 28.4 Train 6 (RasGas 3) 28.2 --
2010 36.1 Train 7 (RasGas 3) 36.2 --
Source: QP, RasGas and QNB 2011 36.1 37.7 --

Capital. 2012 36.1 37.7 --
LNG Summary (mtpa) Qatargas Qatargas and RasGas

and RasGas
Year Production Capacity Contracted LNG Exports Actual LNG Exports
1997 4.4 4.4 2.2
1998 6.6 4.4 3.6
1999 13.2 6.6 6.6
2000 13.2 9.2 10.5
2001 14.1 10.2 12.8
2002 14.6 12.4 13.5
2003 15.1 12.4 14.4
2004 20.2 18.1 18.4
2005 25.2 23.1 22.2
2006 26.2 24.8 25.1
2007 30.9 27.4 27.4
2008 30.9 30.7 30.4
2009 54.0 44.7 --
2010 69.4 70.3 --
Source: QP, Qatargas, RasGas 2011 77.1 76.4 --
and QNB Capital.
2012 77.1 76.4 --

Qatar Currently Exports 2 bn cf/d of Piped Gas to UAE
The Dolphin Project
The Dolphin Project is the first export oriented pipeline project in the GCC region
and paves the way for the creation of a GCC gas grid originating in Qatar. Promoted
by the UAE Government’s Offsets Group (UOG), the Dolphin project has already
received outline commitments from UAE for up to 2 billion cubic feet per day (bn
cf/d) of gas. In June 2000, UOG announced the formation of a company ‘Dolphin
Energy Ltd’ (DEL), to manage the project on its behalf. The ownership structure
of the company is 51% UOG and 24.5% each by TotalFinaElf and Occidental
Petroleum. France’s TotalFinaElf and Occidental of the US were selected as
strategic partners for the project, with TotalFinaElf responsible for the upstream
part of the project and Occidental for the midstream and downstream marketing.
Two upstream MoUs have been signed, one with ExxonMobil and the other with
TotalFinaElf.
The Dolphin Project is scheduled in two phases. The first phase of the project
valued at $3.5 billion involved production and distribution of 2 bn cf/d of gas,
through a sub-sea pipeline which extends over 400-km from Qatar’s North Field to
Taweelah in Abu Dhabi and Jebel Ali in Dubai.
DEL and QP signed the final field development plan for the Dolphin Project in
December 2003. The main EPC contract for the gas processing and compression
plant was awarded in January 2004 to Japan’s JGC Corporation, with platform
package awarded to J Ray Mcdermott Middle East, and the gas turbines to be
supplied by UK’s Rolls Royce. Construction on the Dolphin project is complete
with current gas deliveries having reached 2 bn cf/d.
The second phase of the project involves increased volumes of piped gas to the
UAE.
Figure 3.4:
Dolphin Project Location and
Pipeline Map
Source: UOG Publications.

Qatar’s Aim to Utilise the Country’s Natural Gas Resources have Led to the
GTL Projects
Al Khalij Gas Project
A Development and Production Sharing Agreement (DPSA) to tap additional North

Field gas for domestic projects and regional exports was signed in May 2000 by
QP and ExxonMobil Middle East Gas Marketing Limited, a subsidiary of ExxonMobil
Corporation.
Under the Al Khalij Gas Project, additional North Field gas will be developed through
a new upstream gas development, with power generation (Ras Laffan IWPP), the
Oryx GTL project, and the Mesaieed Industrial Complex representing initial major
users. The first phase of the project (AKG-1) began production in November 2005.
ExxonMobil will extend the Al Khalij Gas Project to meet the domestic demand
relating to electricity, petrochemical, and other Qatari industrial uses.
Barzan Gas Project
A Memorandum of Understanding has been signed between QP and ExxonMobil

to utilise North Field Gas for domestic purposes. QP will hold a 90% stake in the
project with ExxonMobil holding the remaining 10%. The Barzan Gas Project will
involve the processing of 1.4 bn cf/d of gas.
Natural Gas Liquids (NGL)
NGL-1: The first NGL plant, commissioned in 1974, was established with the aim
of utilising onshore associated gas from the Dukhan field. This facility provides
for the NGL’s stripped from the Fahahil Plant (degassing, compressing and NGL
stripping plant located along the Dukhan field) to be separated into ethane rich gas,
propane, butane, and condensate.
NGL-2: The second NGL plant, commissioned in 1980, was established with the
aim of utilising offshore associated gas. This plant obtains NGL’s stripped from
three offshore crude oil production platforms and separates it into methane rich
gas, ethane rich gas, propane, butane, and condensate.
NGL-3: Also referred to as the North Field Gas Plant (NFGP), this plant was
commissioned in 1991 and debottlenecked in 1997, to process an additional
240 mn cf/d of gas from Qatargas. The NFGP was originally designed to process
raw gas and unstabilised condensate, separated from the North Field Alpha
Offshore field.
NGL-4: The NGL-4 project is designed to increase the recovery of Natural Gas
Liquids from the Dukhan Arab D reservoir and the North Field. The plant more
than doubles QP’s NGL capacity and is dedicated both to export markets and
to domestic demand which includes demand from the QAPCO and Q-Chem
projects.
NGL-4 increases Qatar’s recovery of Natural Gas Liquids from North Field Phase 1
of Ethane (875,000 tpa), Propane (735,000 tpa) and Butane (490,000 tpa) to meet
growing demand for these products as a petrochemical feed-stock.
Gas-to-Liquids Projects (GTL)
QP continues to research other avenues for the utilisation of the country’s natural
gas resources. Technologies for the direct conversion of natural gas into globally
marketable and more easily transportable liquid products have evolved significantly
in recent years and are of particular interest as a potential adjunct to direct exports
of LNG and natural gas. QP has allocated QR15.9 billion in its five-year plan,
starting 2009 for GTL and refining projects. QP’s aim of progressing rapidly on
GTL projects can be seen through the following Oryx GTL project, and the Pearl
GTL project.

Qatar Fertiliser Company is now the Largest Producer of Fertiliser in the
Middle East
Oryx GTL Project
Oryx GTL, the world’s largest GTL plant became operational in June 2006, with
first export shipments commencing in April 2007. In July 2001, QP and South
Africa’s Sasol Synfuels International (Sasol) signed a joint venture agreement to
develop a GTL project at Ras Laffan with estimated costs of $1 billion. The project
which is based on Sasol’s slurry phase distillate technology, converts natural gas
into 34,000 bpd of high grade fuels from two trains. The GTL plant uses as feed-
stock about 330 mn cf/d of gas from the Al Khalij Gas Project, and has a capacity
to produce around 24,000 bpd of high purity diesel, 9,000 bpd of naphtha and
1,000 bpd of LPG. The project gets its power requirements from the Ras Laffan
IWPP, and its cooling requirements from the Ras Laffan common sea water
intake.
Pearl GTL Project
In July 2004, QP and Shell signed a DPSA for a GTL plant that will eventually have
a capacity of 140,000 bpd. The project is based on Shell’s proprietary technology
and is planned for a two-phase implementation, wherein the first phase will involve
the construction of a plant with a 70,000 bpd capacity, that will come on-stream in
2010. Construction has started, with current project costs being estimated well in
excess of $15 billion, from the earlier estimates of $6 billion in 2004.
3.3 Gas-Based and Other Major Industrial Projects:
In addition to its roles as the basis for the LNG industry, and as a fuel input for
power generation, natural gas is utilised in a wide range of industries as a feed-
stock to produce various value-added products for both domestic consumption
and export. These projects include the following:
Qatar Fertiliser Company (QAFCO)
QAFCO is a joint venture between Yara International of Norway, with a 25% stake
and Industries Qatar (QP - 70%, Qatari Shareholders - 30%), with the majority 75%
stake. It was established by an Emiri Decree in 1969 to produce Ammonia and
Urea. Currently, the QAFCO complex in Mesaieed comprises of four completely
integrated trains; QAFCO-1 (1973), QAFCO-2 (1979), QAFCO-3 (1997), and
QAFCO-4 (2004), with each train being made up of two units, one for the production
of Ammonia and the other for Urea. QAFCO’s production capacity now stands at
6,150 tons per day (tpd) of Ammonia and 8,700 tpd of Urea. The company is now
the largest producer of fertiliser in the Middle East, with total production in 2008
reaching 2.30 million tons (mt) of Ammonia and 3.00 mt of Urea (Table 3.11).
Figure 3.11: Product 2004 2005 2006 2007 2008

QAFCO’s Production (mt)
Ammonia 1.78 2.14 2.20 2.20 2.30
Urea 2.24 2.99 2.91 2.96 3.00

Source: QAFCO.
Total 4.02 5.13 5.11 5.16 5.30
QAFCO’s Ammonia is mainly directed to India, Jordan, and South Korea, while
Urea exports are destined mainly for USA, Thailand, Australia, and South Africa.
Further expansion plans at QAFCO, referred to as QAFCO-5, will see the addition
of 3,500 tpd of Ammonia and 3,500 tpd of Urea to existing capacity. The
$3.2 billion project is currently under construction and is set to start in the first
quarter of 2011.
In July 2006, QAFCO and Qatar Intermediate Industries Holding Company (QH),
signed an agreement for establishing the $250 million Qatar Melamine Company
(QMC). QAFCO will hold a 60% stake in the project, with QH holding the remaining
40%. QMC will have a production capacity of 60,000 tons per year.

Qatar Petrochemical Company is the Largest Producer of LDPE in the Middle
East
Qatar Steel Company (QASCO)
QASCO is a wholly owned subsidiary of Industries Qatar (IQ), which was initially
set up in 1974 as a joint venture. The plant was commissioned in 1978 as the
first integrated steel plant in the Arabian Gulf region. In 2008, QASCO produced
1,638,000 tons of Hot Briquetted Iron/Direct Reduction Iron from its dual technology
plant, 1,406,000 tons of steel billets, 1,146,000 tons of re-inforced steel bars, and
102,000 tons of coil. Expansion plans at QASCO saw the signing of an agreement
in February 2005 between QASCO and Kobe Steel of Japan, to build a new Direct
Reduction Iron plant with an annual production capacity of 1.5 million tons. The
plant has started operations.
Qatar Fuel Additives Company (QAFAC)
QAFAC is owned by Industries Qatar (50%), OPIC Netherlands Antilles N.V. (20%),
LCY Investments Corporation (15%) and International Octane Ltd. of Canada
(15%). QAFAC’s plant in Mesaieed has a production capacity of 610,000 tpa of
Methyl Tertiary Butyl Ether (MTBE), and 832,500 tpa of Methanol.
The plant’s development costs were in the vicinity of $650 million, with production of
methanol and MTBE starting in June and July 1999 respectively. In 2008, QAFAC
produced 650,000 tons of MTBE and 960,000 tons of Methanol, compared to
481,000 tons of MTBE and 884,000 tons of Methanol produced in 2007. QAFAC
exports the majority of its Methanol to markets in the Far East, Europe, India and
the GCC, while MTBE is exported to the Far East, Europe, North Africa and the
GCC.
Qatar Petrochemical Company (QAPCO)
Industries Qatar owns 80% of QAPCO with the remaining capital of 20% held by
Total Petrochemicals (Chemical arm of France’s TotalFinaElf). QAPCO commenced
full commercial operations in 1981 and produces high quality Ethylene, Low Density
Polyethylene (LDPE) and Sulphur.
QAPCO is currently the largest producer of LDPE in the Middle East with a design
production capacity of 390,000 tpa. Ethylene design production capacity was at
535,000 tpa. In 2008, QAPCO produced 800,000 tons of Ethylene, 420,000 tons
of LDPE and 52,000 tons of Sulphur (Table 3.12).
Table 3.12: Product 2004 2005 2006 2007 2008

QAPCO’s Production (tons)
Ethylene 500,000 550,000 550,000 550,000 800,000
LDPE 370,000 420,000 409,000 359,000 420,000

Source: QAPCO.
Sulphur 44,000 45,000 40,000 32,300 52,000
In December 2004, QAPCO started construction work for the debottlenecking of

the existing Ethane cracker plant, so as to further increase the capacity from the
current 535,000 tpa to 800,000 tpa. Concurrently, LDPE production is expected
to rise to 420,000 tpa. QAPCO is also looking at the possibility of adding another
LDPE line to increase LDPE production by 200,000 tpa.

Qatofin will Produce 450,000 tpa of LLDPE on Completion during the Last
Quarter of 2009
Qatar Vinyl Company (QVC)
QVC is a joint venture between QAPCO (31.9%), QP (25.5%), Norsk Hydro of Norway
(29.7%) and Total Petrochemicals of France (12.9%). Krupp Uhde of Germany
constructed the core process unit of the plant, while Italy’s Technip covered the
development of a 130 MW power generation facility. Project costs were estimated at
$680 million. In 2008, QVC produced 200,000 tons of EDC, 330,000 tons of VCM and
370,000 tons of Caustic Soda. QAPCO provides the Ethylene feed-stock and also
supplies facilities to the company through horizontal integration. South East Asia
and Australia buy a large part of QVC’s production. QVC has already started looking
into expansion prospects, with studies to expand capacity currently underway.
Qatar Chemical Company (Q-Chem)
In November 1997, QP (with a 51% interest) and Chevron Phillips Chemical

Company (with a 49% interest) signed a joint venture agreement to construct
a petrochemical complex, called Qatar Chemical Company (Q-Chem), in the
Mesaieed industrial area.
Construction of the $1.2 billion Ethylene cracker plant with a capacity of 500,000
tpa commenced in 1999, and had its first commercial operational year in 2004.
The plant obtains Ethane and Butane feed-stock from the NGL-4 facility. The
plant has a capacity of 500,000 tpa of Ethylene, 453,000 tpa of High-Density
Polyethylene (HDPE), 47,000 tpa of Hexane-1, and 36,000 tpa of Sulphur. In 2008,
Q-Chem produced 450,000 tons of Ethylene, 450,000 tons of HDPE, 42,000 tons
of Hexane-1, and 40,000 tons of Sulphur.
Qatar Chemical Company II (Q-Chem II)
Qatar Petroleum, with a 51% stake and Chevron Philips Chemical Company (CPC)
with a 49% stake are partners in this joint-venture, which will see the construction
of a ‘world-scale’ High Density Polyethylene (HDPE) and olefins plant, adjacent
to the Q-Chem plant in Mesaieed. The Ethane feed-stock for the project will be
sourced from the Ras Laffan Ethylene Cracker project, which will be fed with
natural gas from the North Field. The project is estimated to cost well in excess of
$1 billion, with a design capacity of 350,000 tpa of HDPE and 350,000 tpa of
normal alpha olefins. The feasibility study for the project has been completed, with
project completion scheduled for the fourth quarter of 2009. A Letter of Intent for
building the plant was signed with Technip of France in April 2005.
QP - Shell Petrochemical Plant
Qatar Petroleum and Shell Chemicals signed a Letter of Intent in March 2005 to set
up a $2 billion world scale Ethane cracker and derivatives complex at Ras Laffan.
QP will hold a 51% stake in the venture, with Shell holding the remaining 49%. The
Ethane cracker project is expected to have a design capacity of 1.3 mtpa, with
studies currently ongoing.
Qatofin
This is a joint venture between QAPCO (63%), Total Petrochemicals (36%) and QP
(1%), which will see the establishment of a Linear Low Density Polyethylene (LLDPE)
plant with a 450,000 tpa capacity. The plant will be located in Mesaieed, adjacent
to the QAPCO facilities. The Ethane feed-stock for the plant will be supplied from
the Ras Laffan Ethylene Cracker project. The EPC contractors for LLDPE plant is
Snamprogetti, with the foundation stone for the project being laid in May 2006.
The plant is scheduled for start-up in the fourth quarter of 2009.

New Doha International Airport will be Able to Handle 50 Million Passengers a
Year
Ras Laffan Ethylene Cracker (RLEC)
This venture between Q-Chem II (53.31%), Qatofin (45.69%) and QP (1%), is

primarily set up with the aim of supplying the Q-Chem II and Qatofin projects
with Ethylene feed-stock. The Ethylene cracker unit is estimated to have a design
capacity of 1.3 mtpa and is to be located at Ras Laffan. The Ethylene feed-stock will
be transported via pipeline from Ras Laffan to Q-Chem II and Qatofin in Mesaieed.
The plant is set to become operational in the fourth quarter of 2009.
Linear Alkyl Benzene (LAB) Project
The expansion and diversification plans of Qatar Petroleum Refinery led to the
development plan for an estimated $340 million integrated Linear Alkyl Benzene
(LAB) project. In January 2003, QP concluded deals to launch a linear alkyl
benzene (LAB) project, in which the private sector will play a partnership role. In
January 2004, QP awarded the EPC contract to South Korea’s LG Engineering
and Construction Company. Linear Alkyl Benzene is produced from N-Paraffin
and Benzene, with the plant having a design capacity of 100,000 tpa of Linear Alkyl
Benzene. In 2008, Linear Alkyl Benzene production reached 120,000 tons.
Qatalum
In March 2006, QP signed a Joint Venture Agreement with Norway’s Hydro for the
construction of an Aluminium smelter plant in Mesaieed Industrial City with an initial
capacity of around 585,000 tpa. To meet the huge power load requirement of the
smelter plant, a power plant with a capacity of 1,350 MW will be constructed along-
side. Project costs are estimated at around $5.0 billion, with expected completion
in the fourth quarter of 2009.
Ras Laffan Condensate Refinery
In September 2006, the foundation for the Ras Laffan Condensate Refinery was
laid with QP holding the majority stake of 51%, followed by ExxonMobil with 10%,
Total S.A. with 10%, Idemitsu with 10%, Cosmo Oil with 10%, Marubeni with
4.5%, and Mitsui with 4.5%. The Ras Laffan Condensate Refinery will have a
refining capacity of 146,000 bpd. The Refinery will receive feedstock from the
North Field and produce Naphtha, Kerojet fuel, Gasoil and LPG. Project costs
are estimated at around $800 million and is scheduled for completion in the third
quarter of 2009.
3.4 Infrastructure Projects
New Doha International Airport
The $11 billion estimated New Doha International Airport (NDIA) will be able to handle
a capacity as large as 50 million passengers a year, on completion of all three phases
of the project by 2015 (Table 3.13). NDIA will be the world’s first airport to be designed
and specifically built to handle the world’s largest passenger aircraft, the Airbus
A380-800. The airport will also have a luxury hotel adjacent to the terminal and
another one within the terminal for transit passengers. In January 2004, US
company Bechtel was awarded the contract to develop the NDIA, by the State
of Qatar.
Table 3.13: Contact Remote Development Passenger

New Doha International Airport Phase Completion
Gates Gates Area Capacity
Phase 1 24 7 130,000 m2 12 million 2010
Phase 2 40 11 219,000 m2 24 million 2012

Source: Qatar Airways and
Published Information. Phase 3 80 11 416,000 m 2
50 million 2015

The $2.6 Billion Energy City will Establish Qatar as an Energy Business Hub
Ras Abu Fontas B (RAF-B2)
The first phase of the expansion project saw the addition of 380 MW to Qatar’s
power grid, taking total capacity at Ras Abu Fontas B to 990 MW. The second-
phase of the expansion will involve the addition of 570 MW of power and 29 million
gallons of water a day of desalination capacity to the existing 33 million gallons of
water a day and the installation of waste heat recovery boilers. The EPC contract
for the power generation was awarded to General Electric, while the contract for
the water desalination was awarded to Fisia Italimpianti.
Ras Laffan Independent Water and Power Projects (IWPP)
The Ras Laffan Independent Water and Power Project (IWPP) is Qatar’s first power
project developed on the build-own-operate-transfer (BOOT) basis and will meet
the rising domestic and industrial demand for power and water. The plant which is
currently fully operational has a capacity of 750 MW of power and 40 million gallons
of water a day. The Ras Laffan Power Company (RLPC) was formed in August
2001, as a Qatari company which undertook the project, in which AES Corporation
owns a 55% share, Qatar Petroleum 10%, Qatar Electricity and Water Company
25%, and Gulf Investment Corporation 10%.
The Ras Laffan B Independent Water and Power Project is Qatar’s second project
developed on the BOOT basis and has a capacity of 680 MW of power and
15 million gallons of water a day. The project has been completed and full
commercial operations have started in 2008. The Qatar Power Company
undertook the project in which Qatar Electricity and Water Company has a 55%
stake, UK’s International Power has a 40% stake, and Japan’s Chubu Electric
Power has a 5% stake.
The Ras Laffan C Independent Water and Power Project which was launched in
April 2008 is set to become Qatar’s largest power plant with a production capacity
of 2,730 MW of power and 63 million gallons of water a day. The Ras Girtas
Power Company has been establsihed to undertake the project in which QP has
a 15% stake, QEWC a 45% stake, and the remaining 40% stake being held by
Suez Energy International and Mitsui. The project is estimated to cost around
$3.8 billion and is set for completion in 2011.
Independent Power Project - 2 (IPP - 2)
The Independent Power Project - 2 (IPP - 2) is a joint venture between QP (30%),

QEWC (30%), and Marubeni Corporation (40%). The plant will be located at
Mesaieed and will have capacity of 2,007 MW of power. The $2 billion estimated
plant is currently under construction and is expected to be completed by the last
quarter of 2009.
Energy City Qatar
The $2.6 billion Energy City Qatar (ECQ) project was launched in March 2006,
with the aim of making Qatar an energy business hub. ECQ is a pioneering
development that will establish Qatar as an integrated energy business centre that
will cater to the needs of the hydrocarbon sector with cutting-edge facilities and
services. ECQ aims to attract the world’s leading oil and gas companies, support
services, infrastructure and downstream activities, shipping and trading, market
and resource data, and energy trading. An energy trading platform called the
International Mercantile Exchange (IMEX) will also be set up as part of the ECQ.
3.5 Health, Education and Tourism Projects
Hamad Medical City
The Hamad Medical City project is estimated to cost QR1.5 billion and will include
a 300-bed unit, a dialysis unit, medical staff accommodation and laboratories. This
project forms part of the QR12.5 billion budget of the Ministry of Municipal Affairs
and Agriculture. Two other new hospital projects are also in the construction
phase; the estimated QR220 million Southern Area Hospital at Wakrah, with a
200-bed facility, and the estimated QR100 million Cardiology Hospital at Rumailah,
with a 110-bed facility.

Qatar’s Hotel Room Capacity will Increase by an Additional 13,624 Rooms by
2012
Education City
The 2,400 acre multi-institutional ‘Education City’ is being set up under the aegis of
the Qatar Foundation for Education, Science and Community Development, which
was established in 1995 by H.H. the Emir Sheikh Hamad Bin Khalifa Al-Thani. The
facility includes higher educational institutions at the university level, specialised
training in design arts and languages, and sporting facilities. The Qatar Foundation
has signed a number of agreements with world renowned educational institutions
to set up branches of their institutions in the ‘Education City’ in Qatar. The first such
agreement was signed with New York based Cornell University for establishing the
‘Weill Cornell Medical College - Qatar’. As part of the Weill Cornell Medical College
- Qatar there is also a proposal to set up a hospital with a 250-300 bed capacity.
The other leading educational institutions represented in Qatar are Washington
based Georgetown University’s Welsh School of Foreign Services, Texas A&M
University which offers engineering degree courses, Carnegie Mellon University
which offers undergraduate programmes in computer science and business,
Northwestern University which offers Bachelor’s degrees in communication and
journalism, Canada based College of North Atlantic and Canadian Bureau of
International Education, among others.
Hotels
Qatar’s hotel room capacity in the 3-5 Star category is set to increase
substantially by an additional 13,624 rooms in the coming years, as a result of
various up-coming projects (Table 3.14).
Table 3.14: Hotel Rooms

Upcoming 3-5 Star Hotels in
Qatar (2009 - 2012) The Pearl-Qatar - Four Seasons 250
Holiday Hotel Villa & Residence 358
Marriott Courtyard 204
Marriott Renaissance Hotel 249
Hilton 310
Shangri-La 271
Rotana 287
Oasis 322
Merweb Grand City Centre 256
Jumeirah Dubai Towers 235
Four Points Hotel 250
Maritim 358
Qatar Silouette 320
Barwa West Bay 370
Al-Quds Tower Hotel 264
Retaj Hotel 218
Qatar Airways Hotel 400
St. Regis 322
Aspire Tower 168
Barwa Al Rayyan Hotel 250
Abdulwahab Tower 488
Grand Saray 240
Barwa Al Khor Hotel 400
Others 6,834
Source: Qatar Tourism and
Exhibitions Authority. Total 13,624

Qatar’s Inflation Averaged 11.3% Over the Past Five Years
4. Inflation
Inflation in Qatar has risen rapidly and increased more than seven-fold in recent
years, averaging 11.3% over the past five years (2004-2008), compared to an
average of 1.6% in the preceding five years (1999-2003). This increase in inflation
over the past few years can be primarily attributed to the rapid and sustained
increase in housing costs. However, during the first half of 2009 Qatar witnessed
a deflation of 3.6% due to the effects of the global financial crisis and its impact on
the housing sector in particular. The group Housing which has the highest weight
of 32.2% on the index, declined by 8.4% during the first half of 2009 (Table 4.1).
The overall annual inflation rate reached an all time high of 15.1% in 2008,
compared to an increase of 13.8% in 2007. Consumer Price Index (CPI) data
released by the Qatar Statistics Authority for 2008 show all the main groups of
commodities and services on the index witnessed an increase. The group Food
and Beverages with an increase by 19.9%, along with the group Housing were the
main inflation drivers in 2008. Housing continues to be one of the main inflation
drivers in 2008, increasing by 19.6%, after an increase of 29.3% in 2007, and a rise
of 26.0% in 2006. Among the other groups of commodities and services in 2008,
the group miscellaneous goods and services increased by 12.4%, with the group
garments and footwear increasing by 11.8%, and the group education, culture and
recreation going up by 9.9%. Going forward, QNB Capital estimates inflationary
pressures to ease considerably in 2009 to between 3-5%, with the cooling down
of the housing market.
Table 4.1: 2006 2007 2008 2008 Jan - Jun 2009

Consumer Price Index
(2006 = 100) Groups of Commodities and % % % %
Services Change Change Change Index Index Change
Food, Beverages and Tobacco 7.33% 7.36% 19.94% 128.77 130.13 1.06%
Garments and Footwear 12.43% 12.59% 11.79% 125.86 122.92 -2.34%
Housing 25.97% 29.33% 19.61% 154.69 141.77 -8.35%
Furniture, Textiles and Home Appliances 3.94% 5.42% 7.71% 113.55 109.49 -3.58%
Medical Care and Medical Services 1.17% 1.23% 4.22% 105.50 106.73 1.16%
Transport and Communications 1.87% 2.36% 8.87% 111.44 107.29 -3.73%
Education, Culture and Recreation 2.32% 4.96% 9.86% 115.31 114.27 -0.90%
Miscellaneous Goods and Services 13.60% 4.55% 12.38% 117.49 124.40 5.88%
Authority. General Index 11.84% 13.76% 15.05% 130.90 126.23 -3.57%
The most recent Family Expenditure Survey (FES) conducted by the Qatar Statistics
Authority in 2006/07, reflects the changing spending patterns of households and
also the changing nature of the market. The 2006/07 FES shows that the average
household (Qatari and Non-Qatari) has an expenditure of QR21,852 per month,
with Qatari households having a monthly expenditure of QR40,757, and Non-
Qatari households having an expenditure of QR13,329 per month. The average
household spending per month on Housing is QR7,036 per month, which forms
32.2% of total monthly expenditure. Average monthly household expenditure on
Transport and Communication is QR4,480 and for Food and Beverage is QR2,885
(Table 4.3).
The new weights for the groups of commodities and services on the Consumer Price
Index (CPI), based on the FES conducted in 2006/07 shows that the group Housing
now forms the largest part of household expenditures, with a weight or part of total
expenditures at 32.2%, compared to 19.1% in 2000/01. The group Transportation
forms the second largest part of household expenditures with a weight of 20.5%,
followed by group Food and Beverages with a weight of 13.2% (Table 4.2).

The Group Housing has the Biggest Weight of 32.2% on the Consumer Price
Index
Table 4.2: Groups of Commodities

Weightage on the Consumer Relative Importance (Weight on 10,000)
and Services
Price Index
FES-2000/01 % Spent FES-2006/07 % Spent
Food and Beverage 1,809 18.1 1,322 13.2
Clothing and Footwear 711 7.1 582 5.8
Housing 1,914 19.1 3,215 32.2
Furniture and Furnishings 863 8.6 822 8.2
Medical Care and Services 214 2.2 204 2.0
Transport and
1,577 15.8 2,047 20.5
Communication
Education, Entrtainment and

1,608 16.1 1,085 10.9
Culture
Miscellaneous Goods and

1,304 13.0 723 7.2
Services
Authority. Total Weight 10,000 100.0 10,000 100.0
Table 4.3: Groups of Commodities Average Household

Family Expenditure Survey % Spent
and Services (QR Spent)
(2006/07)
Food and Beverage 2,885 13.2
Clothing and Footwear 1,267 5.8
Housing 7,036 32.2
Furniture and Furnishings 1,792 8.2
Medical Care and Services 437 2.0
Transport and
4,480 20.5
Communication
Education, Entertainment and

2,382 10.9
Culture
Miscellaneous Goods and

1,573 7.2
Services
Authority. Total 21,852 100.0

Qatar’s Exports have Grown by an Average of 33.6% from 2004 - 2008
5. Balance of Payments
Foreign Trade
Qatar’s exports and imports have increased rapidly in recent years due to the huge
ongoing and completed gas, oil, industrial, infrastructure, educational and tourism
related projects.
Qatar’s exports have grown by an average of 33.6% over the past five years
(2004 - 2008). Qatar’s successful diversification efforts are being realised, with
increased export revenues coming in from natural gas, chemicals and related
products, and iron and steel (Table 5.2). Qatar’s exports have grown by 203%
over the five-year period from 2004 to 2008, to reach QR206.0 billion ($56.6 billion)
in 2008, from QR68.0 billion in 2004.
Qatar’s imports have been showing a more impressive growth rate averaging 43.1%
during the past five years (2004 - 2008). Qatar’s various project requirements
have led to the big rise in imports, as can be seen through the increase in imports
of machinery and mechanical appliances and also building materials (Table 5.5).
Qatar’s imports have grown by 365% over the five year period from 2004 to 2008,
to reach QR91.5 billion ($25.1 billion) in 2008, from QR19.7 billion in 2004.
The Balance of Payments situation has been equally impressive, with consecutive
surpluses being recorded since 1999.
Exports
Qatar’s exports increased by 34.7% in 2008, to reach QR206.0 billion, from

QR153.0 billion in 2007 (Table 5.1). The export data obtained from the Qatar
Statistics Authority show significant increases in the export of crude oil, LNG,
chemicals and related products, and iron and steel.
The increase in crude oil export revenues in 2008 was due to the high oil prices.
QNB Capital forecasts indicate that Qatar’s exports will drop in 2009 with the
decline in oil prices and production, and the decline in gas and related industry
product prices.
Table 5.1:
Particulars (QR Million) 2004 2005 2006 2007 2008
Balance of Payments
(2004 - 2008)
Exports 68,013 93,774 123,945 152,953 205,997
Imports (19,691) (32,992) (53,911) (72,158) (91,492)
1. Trade Balance 48,322 60,782 70,034 80,795 114,505
2. Services and Private Transfers (Net) (20,833) (33,547) (35,604) (42,771) (56,703)
3. Current Account (1+2) 27,489 27,235 34,430 38,024 57,802
4. Net Capital Transfers (private and official) (13,194) (10,915) (14,630) 8,070 (8,272)
Authority and Qatar Central Bank. 5. Surplus in Balance of Payments (3+4) 14,295 16,320 19,800 46,094 49,530

Qatar’s Main Export Item in 2008 was Petroleum and Related Products
Qatar’s principal export items in 2008 were mineral fuels and products, which
accounted for 89.6% of the total value of goods exported, followed by chemicals
and related products (Table 5.2).
Table 5.2: Export Items (QR Million) 2004 2005 2006 2007 2008
Qatar’s Main Items of Export
(2004 - 2008) 1. Mineral Fuels and Products 58,935 83,223 111,204 136,915 184,500
(a) Petroleum and Related Products 35,417 51,518 63,875 75,761 100,413
(b) Gas - Natural and Manufactured 23,518 31,705 47,329 61,154 84,087
(I) LNG 19,794 24,564 32,340 34,496 58,783
(II) Condensates 1,673 4,335 10,781 19,364 23,230
(III) Propane 1,450 2,012 3,011 4,381 --
(IV) Butane 601 794 1,197 2,361 836
(V) Ethylene, Propylene, Butylene -- -- -- 552 1,238
& Butedine
2. Chemicals and Related Products 6,444 7,172 9,621 12,215 16,368
(a) Plastics in Primary Form (Polyethylene) 1,442 2,233 4,036 4,848 5,073
(b) Fertilisers (Urea) 1,436 2,494 2,453 3,262 5,377
(c) Organic Chemicals (Methanol - Vinyl 2,578 1,915 2,248 3,012 4,292
Chloride - Hexane)
(d) Inorganic Chemicals (Helium - 828 454 818 966 1,391
Ammonia - Caustic Soda)
(e) Others 160 76 66 127 235
3. Iron and Steel and Related Articles 1,363 1,463 1,336 1,535 1,305
4. Sulphur, Limestone and Cement 82 108 86 164 442
5. Aluminium and Related Articles 9 29 23 29 18
6. Others 330 239 132 167 214
7. Re-Exports 850 1,540 1,543 1,928 3,150

Authority.
Total 68,013 93,774 123,945 152,953 205,997
Qatar exported 30.4 million tons (mt) of LNG in 2008 which accounted for 28.5%
of overall export earnings. LNG export revenues have increased by 197% over the
past five years to reach QR58.8 billion in 2008 from QR19.8 billion in 2004. LNG
export destinations have increased over the years with new SPA’s being signed
with major international companies. South Korea is the leading importer of LNG
and in 2008 received 8.5 mt of LNG, followed by India with 7.5 mt, Japan with
6.9 mt and Spain with 3.5 mt (Table 5.3).
Table 5.3: Country (Million Tons) 2004 2005 2006 2007 2008
LNG Exports (2004 - 2008)
South Korea 6.0 6.2 6.7 8.2 8.5
India 2.0 4.5 5.0 6.2 7.5
Japan 6.9 6.2 6.4 6.4 6.9
Spain 3.2 3.7 3.7 3.5 3.5
Belgium -- -- -- 1.7 2.2
Others 0.3 1.6 3.3 1.4 1.8
Source: QatarGas & RasGas. Total 18.4 22.2 25.1 27.4 30.4
Qatar’s leading export trade partner in 2008 was Japan, accounting for 33.3%
of the total value of exports. South Korea, Singapore, India, and Thailand were
some of Qatar’s other main export trade partners during 2008 (Table 5.4). India
currently is the second largest importer of Qatari LNG receiving 7.5 million tons in
2008, and entered the top export trade partners list for the first time in 2004, and
continues to gain prominence in the list in 2008 with exports to India increasing from
QR3,661 million in 2004, to QR10,434 million in 2008.

Qatar’s Main Import Item in 2008 was Machinery and Mechanical Appliances
Table 5.4: Country (QR Million) 2004 2005 2006 2007 2008
Exports to Main Trade Partners
(2004 - 2008)
Japan 28,315 37,506 51,388 62,072 68,624
South Korea 10,677 14,771 17,198 26,698 43,535
Singapore 6,169 7,686 11,715 17,294 23,379
India 3,661 3,262 6,036 9,720 10,434
Thailand 1,863 1,903 3,390 7,003 7,398
Belgium 10 64 345 2,195 4,984
Spain 1,262 898 3,051 3,410 4,940
New Zealand 250 441 675 1,030 3,944
UAE 2,243 4,280 5,355 5,693 3,170

Authority.
Taiwan 929 2,382 1,944 1,850 2,555
Imports
Qatar’s imports (fob) increased by 26.8% in 2008 to reach QR91.5 billion, from
QR72.2 billion in 2007 (Table 5.1). Data on imports obtained from the Qatar
Statistics Authority show that Qatar’s main items of import in 2008 consisted
of machinery and mechanical appliances, base metals, vehicles and transport
equipment, and food products (Table 5.5). Machinery and mechanical appliances
gained top spot in the list of import items due to the various energy sector,
infrastructure and industrial projects that are ongoing. Qatar continues to import
substantial quantities of base metals, primarily iron and steel, to keep pace with the
needs of the burgeoning construction sector.
Table 5.5: Import Items

2004 2005 2006 2007 2008
Qatar’s Main Items of Import (QR Million)
(2004 - 2008)
1. Machinery and
Mechanical 4,630 12,053 21,593 31,600 37,997
Appliances
2. Base Metals and
Articles of Base 2,717 6,058 11,766 16,159 20,012
Metals
3. Vehicles and Other 1,402 5,200 8,857 9,641 12,807
Transport Equipment
4. Food Products 1,438 2,064 2,811 3,453 5,544
5. Cement, Iron Ores, 850 1,838 2,702 3,877 5,222

Earths and Stones
6. Chemicals and 1,010 1,932 2,415 3,255 4,704
Related Products
7. Optical, Photographic
and Measuring 700 1,342 1,811 1,980 2,008
Equipment
8. Furniture 374 801 1,484 1,450 1,896
9. Textiles and Textile 632 858 1,395 1,531 1,834

Articles
10. Plastics and Related 410 631 966 1,248 1,656
Articles
11. Aircrafts and Parts 6,136 493 476 1,065 1,517
12. Pearls, Precious

Stones and Precious 336 501 674 1,180 819
* Values at CIF (including Metals
customs, insurance and freight).
13. Others 1,221 2,850 2,785 3,658 5,540
Authority. Total* 21,856 36,621 59,735 80,097 101,556

Qatar’s Main Import Trade Partner in 2008 was Japan
In 2008, Qatar’s main import trade partner was Japan, accounting for 9.6% of the
total value of imports, followed by USA with 9.0% and Germany with 8.4% (Table 5.6).
Imports from Japan increased rapidly in 2008, mainly as a result of imports of
machinery and mechanical appliances for the oil and gas industry, and vehicle and
transport equipment.
Table 5.6: Country (QR Million) 2004 2005 2006 2007 2008
Imports from Main Trade Partners
(2004 - 2008)
Japan 1,141 4,263 7,183 7,982 9,785
USA 2,102 4,232 5,900 9,120 9,169
Germany 1,149 3,362 5,581 6,209 8,527
Italy 740 2,365 5,543 8,229 7,474
China 668 1,892 3,483 4,660 7,327
UAE 1,381 2,356 3,606 5,632 6,728
South Korea 409 1,658 3,278 4,863 5,577
Saudi Arabia 2,079 2,093 3,055 3,925 4,954
UK 1,119 2,096 2,985 3,769 4,773

Authority.
Turkey 117 254 1,217 1,716 3,827
Current Account
Qatar’s trade balance increased by 41.7% in 2008 to reach QR114.5 billion, from
QR80.8 billion in 2007. Qatar’s trade balance increase in 2008 was mainly due to
the price and production increase in both oil and gas.
The net outflow of services and private transfers has steadily increased over the
years, mainly due to repatriation of funds by expatriate workers, and in 2008
reached QR56.7 billion. Preliminary numbers released by the QCB for the year 2008
indicates a current account surplus of QR57.8 billion ($15.9 billion), compared to a
surplus of QR38.0 billion ($10.4 billion) in 2007 (Fig. 5.1).
Overall Balance of Payments
Net capital transfers amounted to QR8.3 billion in 2008, resulting in a record overall
Balance of Payments surplus of QR49.5 billion (Fig. 5.2). Balance of Payments
surpluses are likely to remain strong in the coming years on the back of increasing
quantities and diversified product exports.

Qatar’s Trade Balance Reached QR114.5 Billion in 2008
Figure 5.1:
60,000
Qatar’s Current Account Balance 57,802
(QR Million)
55,000
50,000
45,000
40,000 38,024
34,430
35,000
30,000 27,489 27,235
25,000
20,000
15,000
10,000
Authority & QCB.
2004 2005 2006 2007 2008
Figure 5.2: 120,000

Qatar’s Balance of Payments 114,505
(QR Million)
110,000
100,000
90,000
80,795
80,000
70,034
70,000
60,782
60,000
50,000 49,350
48,322 46,094
40,000
30,000
20,000 16,320 19,800

14,295
10,000
2004 2005 2006 2007 2008

Authority & QCB.
Trade Balance Balance of Payments Surplus

Domestic Liquidity witnessed an increase by 2.3% during the First Half of 2009
6. Monetary Policy
The monetary management in Qatar is implemented by Qatar Central Bank (QCB)
which was established by Law No. 15 for the year 1993, from what was formerly
called the Qatar Monetary Agency (QMA).
The main objective of the QCB is to regulate the monetary, credit and banking
policies in accordance with the general plans of the State, in order to support the
national economy and the stability of the currency. QCB has full powers over the
monetary policies of the State, and supervises and controls banks and financial
institutions.
An effective monetary tool utilised by the QCB is the imposition of minimum reserve
requirements for commercial banks. In February 2000, QCB instructed banks to
maintain cash reserves equal to 2.75% of total deposits (including foreign deposits)
instead of 19% of total demand deposits, previously in effect.
Another important monetary tool used by the QCB is the loans-to-deposit ratio
limit applied to commercial banks, which is set at 90% of the total deposits base
and any bank that exceeds this limit is penalised by the QCB.
6.1 Domestic Liquidity
Domestic Liquidity witnessed an increase by 2.3% during the first half of 2009 to
reach QR188.2 billion, compared to QR184.0 billion as at year-end 2008 (Table 6.1).
In 2008, Domestic Liquidity increased by 19.7% to reach a high of QR184.0
billion. High domestic liquidity has resulted from the continued rally in energy
prices for most part of 2008. In 2008, narrow money supply (M1) increased
by 24.9% to reach QR50.9 billion, from QR40.7 billion in 2007. The increase
in M1 resulted from an increase in demand deposits, which rose by 25.5% to
reach QR45.5 billion. Savings and time deposits increased by 33.1% to reach
QR85.7 billion, compared to QR64.3 billion in 2007. Foreign currency deposits
witnessed a decline by 2.4% in 2008 to QR47.5 billion. Domestic Liquidity
increased by 39.5% in 2007 to reach a level of QR153.7 billion, compared to
QR110.2 billion in 2006.
Table 6.1: (QR Million) 2005 2006 2007 2008 June 2009
Money Supply
(2005 - June 2009) Currency with public 2,866 3,959 4,487 5,368 5,543
Demand deposits 22,791 29,533 36,250 45,502 45,909
Narrow Money Supply (M1) 25,657 33,492 40,737 50,870 51,452
Savings and time deposits 28,409 39,622 64,349 85,676 112,019
Foreign currency deposits 24,835 37,059 48,650 47,459 24,704
Total quasi money 53,244 76,681 112,999 133,135 136,723

Source: Qatar Central Bank. Broad Money Supply (M2) 78,901 110,173 153,736 184,005 188,175
6.2 Exchange Rate Policy
The Qatari Riyal is officially pegged to the US dollar at a rate of 1 US$ = QR3.640.
In 2008, the Qatari Riyal continued its slide against major currencies, while making
a gain against the Sterling Pound. In 2008, the Qatari Riyal declined by 14.2%
against the Japanese Yen, by 11.1% against the Swiss Franc, and by 7.5% against
the Euro, while gaining on the Sterling Pound by 7.4% (Table 6.2).
In 2007, the Qatari Riyal witnessed big declines against the major european
currencies, while making marginal gains against the Japanese Yen. In 2007, the
Qatari Riyal declined by 9.1% against the Euro, by 8.6% against the Sterling Pound,
and by 4.5% against the Swiss Franc, while gaining on the Japanese Yen by 1.2%.

Overnight QMR Lending Rate Stood at 5.5% and Deposit Rate at 2.0% as at
June 2009
Table 6.2: (Average) 2004 2005 2006 2007 2008

Change in Qatari Riyal against
other major currencies
(2004 - 2008) Pound Sterling -12.1% 0.6% -1.2% -8.6% 7.4%
Note: An Emiri Decree (No. 34)

was issued in July 2001 fixing the
Euro -10.0% -0.2% -0.9% -9.1% -7.5%
Qatari Riyal to the US$ at a rate
of 1 US$ = QR3.64. Swiss Franc - 8.3% 0.1% 0.7% -4.5% -11.1%
Source: Qatar Central Bank.
Japanese Yen (Per 100) -7.2% 1.8% 5.2% 1.2% -14.2%
6.3 Interest Rate Policy
Up until 1996, the QCB imposed a ceiling on interest rates offered by commercial
banks on credits and deposits. In February 2001, the QCB removed its ceiling
on interest rates for local currency deposits, freeing the banking system from all
interest rate policy restrictions.
In July 2001, the QCB introduced a new monetary instrument called the “Qatar
Monetary Rate” (QMR), which allows banks in Qatar to deposit or borrow from the
QCB, overnight funds of an amount not less than QR2.0 million, at rates determined
by the QCB, which are fixed on a daily basis.
The US Federal Funds rate has witnessed a number of cuts in 2008 as a result of a
slowing US economy and the ongoing financial crisis. The US Federal Funds rate
stood between 0.00% - 0.25% as at June 2009, while the QCB Repo rate stood
at 5.55%, with the QMR Lending rate at 5.50%, and the QMR Deposit rate at
2.00% (Table 6.3).
Table 6.3: US Fed Funds QCB Repo QMR Lending QMR Deposit
End of Period
US Federal Funds Rate and QCB Rate (%) Rate (%) Rate (%) Rate (%)
Repo Rate Movements
2003 1.00 1.53 1.33 1.23
2004 2.25 3.15 2.60 2.50
2005 4.25 5.10 4.50 4.40
2006 5.25 5.55 5.50 5.15
2007 4.25 5.55 5.50 4.00
2008 0.00 - 0.25 5.55 5.50 2.00
March 2009 0.00 - 0.25 5.55 5.50 2.00

Source: Qatar Central Bank and
Financial Times. June 2009 0.00 - 0.25 5.55 5.50 2.00

Net Profit of Qatari Banks Increased by 5.4% During the First Half of 2009
7. Banking Sector
The Qatari banking sector comprises of a combination of national and foreign banks.
A total of 17 banks currently operate in Qatar, nine of which are Qatari institutions,
including six commercial banks (ahlibank, Al Khaliji Bank, Commercialbank, Doha
Bank, International Bank of Qatar, and Qatar National Bank) and three Islamic
institutions (Masraf Al Rayan, International Islamic and Qatar Islamic Bank). Also
represented is the local branches of seven foreign banks including Arab Bank, Bank
Saderat Iran, HSBC, Mashreqbank, BNP Paribas, Standard Chartered, and United
Bank. A specialised government owned institution - Qatar Development Bank, was
established in 1997 and provides financing to small and medium scale industries.
In 2008, the domestic banking system continued to witness the rapid expansion
of local banks both regionally and internationally, through branches, representative
offices, equity stakes, joint ventures and acquisitions. In 2008, QNB’s strategic
expansion into the Middle East and North Africa Region saw it acquire a 24% stake
in the UAE-based Commercial Bank International and a 50% stake in the Tunisian-
Qatari Bank. Further, QNB’s stake in Jordan’s Housing Bank for Trade and Finance
was increased to 33%. Additionally, QNB established a full service branch in
Singapore, while QNB Al Islami opened its first international branch in Sudan.
Banking Sector - June 2009
During the first half of 2009, Qatari Banks continued to perform well even as the
global financial crisis continued, with Net Profits increasing by 5.4% to reach
QR5,567.3 million, compared to QR5,280.0 million achieved during the first half
of 2009 (Table 7.2). During the first half of 2009, Total Assets of Qatari Banks
increased by 10.4% to reach QR378.3 billion, compared to QR342.7 billion as at
June 2008. Customer Deposits rose by 13.7% during the first half of 2009 to reach
QR237.0 billion, with loans and advances increasing by 13.8% to reach QR218.2
billion. Total Shareholders’ Equity reached QR58.4 billion as at June 2009.
The market share of QNB and other Qatari banks as at June 2009 are presented
graphically in Figure 7.1, while the profit distributions of local Qatari banks during
2004 - 2008 are highlighted below in Table 7.1.
Table 7.1: 2004 2005 2006 2007 2008

Qatari Banks Dividend
Distribution (2004 - 2008) QNB
Cash Dividend (%) 60% 75% 60% 50% 75%
Bonus Shares Nil 1 for 4 1 for 4 1 for 5 1 for 4
Doha Bank
Cash Dividend (%) Nil Nil 5% 40% 50%
Bonus Shares 7 for 10 8 for 10 Nil 1 for 5 Nil
Commercialbank
Cash Dividend (%) 40% 40% 70% 40% 70%
Qatar Islamic Bank
Cash Dividend (%) Nil 25% 70% 20% 70%
ahlibank
Cash Dividend (%) 18.75% Nil 15% 20% 50%
Bonus Shares Nil 1 for 3 1 for 4 3 for 20 Nil
International Islamic
Cash Dividend (%) 10% Nil Nil Nil 40%
Bonus Shares 3 for 10 1 for 1 1 for 2 8 for 10 Nil
Masraf Al Rayan
Source: Banks’ Annual Reports Cash Dividend (%) - - - 10% 15%
and Published Information.
Bonus Shares - - - Nil Nil

QNB has the Largest Market Share in Qatar
Figure 7.1:
Market Share (June 2009)
Assets 61.1% 38.9%
Deposits
56.6% 43.4%
Loans & Advances
62.0% 38.0%
Net Profit
62.9% 37.1%

Total Assets of Banks in Qatar Reached QR410.6 Billion as at June 2009
Table 7.2: Total Assets Customer Deposits

Balance Sheets of Qatari Banks
June June June June
(QR Million) 2008 2008
2008 2009 2008 2009
Qatar National Bank 151,974 152,640 147,115 104,253 98,524 102,823
Commercialbank 61,302 53,818 59,043 32,186 28,918 30,039
Doha Bank 39,003 36,773 43,812 23,277 24,995 23,398
Qatar Islamic Bank 33,543 26,960 35,685 16,592 15,509 20,202
Masraf Al Rayan 16,769 13,648 22,613 10,898 8,146 16,903
International Bank of Qatar 22,411 22,411 22,308 11,465 10,538 14,022
ahlibank 17,799 17,742 16,800 12,111 12,649 11,410
International Islamic 12,842 12,643 14,706 9,139 9,138 10,508
al khaliji Bank 12,501 6,033 16,219 4,673 26 7,664
Total 368,144 342,668 378,301 224,594 208,443 236,969
Foreign Banks 31,349 33,870 32,279 20,442 24,321 20,255
Balance Sheets of Qatari Banks Loans and Advances Shareholders’ Equity

June June June June
2008 2009 2008 2009
Qatar National Bank 100,053 84,285 82,898 16,643 18,982 17,725
Commercialbank 33,898 29,848 32,051 9,978 7,422 10,508
Doha Bank 23,966 23,385 23,614 4,913 4,772 5,054
Qatar Islamic Bank 18,866 15,264 19,711 7,143 6,589 7,524
Masraf Al Rayan 13,326 10,668 16,886 5,694 5,036 5,467
International Bank of Qatar 13,177 9,183 13,591 2,593 1,908 2,583
ahlibank 11,547 11,542 11,163 1,640 1,700 1,673
International Islamic 8,253 6,367 10,179 2,780 2,686 3,062
al khaliji Bank 6,980 1,225 8,151 4,546 4,574 4,789
Total 230,066 191,767 218,244 55,930 53,669 58,385
Foreign Banks 15,632 14,273 14,932 3,748 N/A N/A
Balance Sheets of Qatari Banks Share Capital Net Profit

June June June June
2008 2009 2008 2009
Qatar National Bank 2,409 2,409 3,011 3,652.5 1,857.0 2,067.4
Commercialbank 2,062 1,869 2,165 1,702.4 1,039.1 943.3
Doha Bank 1,722 1,722 1,809 946.5 579.3 646.3
Qatar Islamic Bank 1,969 1,969 2,068 1,642.5 853.5 812.6
Masraf Al Rayan 4,125 4,125 4,125 917.0 250.1 386.5
International Bank of Qatar 1,000 321 1,000 305.1 150.0 176.0
ahlibank 584 584 613 425.8 187.6 171.6
International Islamic 1,261 1,261 1,324 501.2 350.8 255.2
Note: Foreign banks’ Net profit is al khaliji Bank 3,600 3,600 3,600 29.3 12.6 108.4
on after tax basis.
Total 18,732 17,860 19,715 10,122.3 5,280.0 5,567.3
Source: Banks’ Annual Reports
and Published Information.
Foreign Banks -- N/A N/A 625.7 N/A N/A

Domestic Credit Facilities witnessed a Slight Decline during the First Half of
2009
8. Domestic Credit Facilities

Total Domestic Credit facilities declined by 2.5% during the first half of 2009 to
QR215,322 million, compared to QR220,807 million as at year-end 2008 (Table 8.1).
In 2008, total domestic credit facilities increased by 51.0% to reach QR220,807
million, compared to QR146,329 million in 2007. In 2008, credit facilities to all
sectors increased substantially. Total domestic credit facilities increased by 54.4%
in 2007, and by 40.7% in 2006.
The Personal Sector currently accounts for the largest portion of domestic credit
facilities and as at June 2009 accounted for 26.2% of total domestic credit
facilities (Figure 8.1). During the first half of 2009 the domestic credit facilities
to the Personal Sector witnessed a marginal decline to QR56,345 million from
QR56,771 million as at year-end 2008. In 2008, the domestic credit facilities
to the Personal Sector increased by 20.5% to reach QR56,771 million. The
Personal Sector has witnessed tremendous growth in recent years with domestic
credit facilities extended to this sector witnessing an over four-fold increase
to reach QR56,771 million in 2008, from QR11,503 million in 2003. In 2007,
domestic credit facilities to the Personal Sector increased by 34.0% to reach
QR47,123 million, compared to QR35,177 million in 2006.
Table 8.1: Sector (QR Million) 2005 2006 2007 2008 June 2009
Credit Facilities by Economic
Public 18,650 21,537 35,902 60,589 46,981
Sector (2005 - June 2009)
Merchandise 8,184 11,553 17,978 21,884 22,617
Industry 2,419 2,078 3,460 5,501 6,733
Land, Housing & Construction 9,541 15,745 27,967 44,733 49,147
Personal 24,731 35,177 47,123 56,771 56,345
Services 2,942 7,246 11,090 26,441 27,411
Others 900 1,437 2,809 4,888 6,088
Total Domestic Credit 67,367 94,773 146,329 220,807 215,322
Source: Qatar Central Bank. Outside Qatar 2,368 7,775 14,267 21,846 18,419
Domestic credit facilities extended to the Land, Housing and Construction Sector
showed no signs of slowing down even during the first half of 2009 with a growth
of 9.9% to reach QR49,147 million. The Land, Housing and Construction Sector
accounted for the second largest portion of domestic credit facilities as at June
2009. In 2008, the domestic credit facilities extended to the Land, Housing and
Construction Sector increased by 60.0% to reach QR44,733 million. The credit
facilities extended to the Land, Housing and Construction Sector recorded a growth
of 77.6% in 2007 to reach QR27,967 million, from QR15,745 million in 2006. The
higher spending by the State on infrastructure projects, education projects, health
and social welfare projects, and various other hotel, commercial and residential
construction projects have been the main reasons for the substantial growth in this
sector in recent years.
Domestic credit facilities to the Public sector declined by 22.5% during the first
half of 2009 to QR46,981 million, compared to QR60,589 million as at year-end
2008. The Public Sector had overtaken the Personal Sector in 2008 to account for
largest portion of domestic credit facilities. In 2008, domestic credit facilities to the
Public Sector increased by 68.8% to reach QR60,589 million. The share of credit
facilities to the Public Sector as a percentage of total domestic credit facilities had
been declining from a high of 46.0% in 2003, to 24.5% in 2007, as the government
finances witnessed a stark improvement supported by its successful economic
diversification efforts and higher energy prices and exports. However, the Public
Sector continues to use short-medium term financing for its various development
projects. Domestic credit facilities to the Public Sector increased by 66.7% in
2007 to reach QR35,902 million, compared to QR21,537 million in 2006.
Credit facilities extended to the Merchandise Sector grew by 3.3% during the first
half of 2009 to reach QR22,617 million. In 2008, credit facilities to the Merchandise
Sector increased by 21.7% to reach QR21,884 million, compared to QR17,978 million
in 2007. In 2007, this sector recorded a growth of 55.6%.

The Personal Sector Accounts for the Largest Portion of Domestic Credit
Facilities
The domestic credit facilities to the Services Sector increased by 3.7% during the
first half of 2009 to reach QR27,411 million. In 2008, domestic credit facilities to
the Services Sector increased by 138.4% to reach QR26,441 million. In 2007, the
Services Sector recorded a growth of 53.0%, receiving QR11,090 million out of
total domestic credit facilities.
Domestic credit to the Industry Sector witnessed a growth of 22.4% during

the first half of 2009 to reach QR6,733 million. In 2008, domestic credit to this
sector increased by 59.0% in 2008 to reach QR5,501 million, compared to
QR3,460 million in 2007.
Credit facilities extended outside Qatar declined by 15.7% during the first half of
2009 to QR18,419 million. In 2008, credit facilities outside Qatar increased by
53.1% to reach QR21,846 million. In 2007, credit facilities outside Qatar recorded
an increase of 83.5% to reach QR14,267 million, from QR7,775 million in 2006.
Credit facilities outside Qatar has witnessed a huge growth in recent years, rising
from QR442 million in 2003 to QR18,419 million as at June 2009.
Figure 8.1: 12.7%

Distribution of Credit Facilities
(June 2009) 26.2% 22.8%
2.8%
21.8%
13.7%
Source: Qatar Central Bank.

Qatar has Witnessed a Budget Surplus in each of the Past Nine Fiscal Years,
Totaling QR140.8 Billion
9. Public Finance
The Government’s primary source of budget revenues are oil and gas related,
which are generated by QP’s activities. In addition to such export receipts, the
Government obtains revenues primarily from dividend income of other industrial
enterprises, including Industries Qatar, QNCC, QEWC and commercial enterprises
and banks such as Q-TEL and QNB. Other sources of Government revenues
include investment income, customs duties, taxes, public utility fees and other
charges.
The principal items of Government expenditure are wages and salaries of the
public sector, interest payments on government indebtedness, other current
expenditures, and capital expenditures.
Available data from the Ministry of Economy and Finance estimates indicate
a budget surplus in each of the past nine fiscal years amounting to a total of
QR140.8 billion ($38.7 billion). These surpluses highlight the turnaround that has
been achieved by the government, after almost a decade of deficits. Qatar’s
improved fiscal position along with reduced debt servicing requirements has
resulted in a better outlook and higher sovereign ratings from Standard & Poor’s,
Moody’s and Capital Intelligence.
2006/07 Budget
Data on government revenues and expenditures released by the Ministry of

Economy and Finance for the fiscal year 2006/07, shows that total revenues
continue on an upward trend and increased by 31.0% to reach QR86,063 million,
while total expenditures increased by 32.3% to reach QR67,147 million, resulting
in a surplus of QR18,916 million. Oil prices recorded an increase of 11.4% during
the fiscal year 2006/07 and averaged $62.1 p/b, compared to an average of
$55.7 p/b during the fiscal year 2005/06. Oil production averaged 808,000 bpd
during the fiscal year 2006/07.
Table 9.1: 2006/07 2007/08 2008/09* 2008/09 2009/10

(QR Million)
The State Budget Actual Actual Prelim. Budget Budget
Total Revenues 86,063 117,850 136,278 103,300 88,700
Expenditure
Note:
(1) Surplus as a % of GDP is
calculated using GDP on a Total Current Expenditure 49,751 50,969 64,560 55,400 56,600
calendar year basis and budget
figures on a fiscal year basis Total Capital Expenditures 17,396 33,931 32,862 40,500 37,900
ending.
Total Expenditures 67,147 84,900 97,422 95,900 94,500

* Preliminary Data
Surplus/(Deficit) 18,916 32,950 38,856 7,400 (5,800)
Source: Ministry of Economy
and Finance.
Surplus as % of GDP (1)
9.2 12.7 10.6 -- --
2007/08 Budget
Data on government revenues and expenditures released by the Ministry of Finance

for the fiscal year 2007/08, shows that total revenues increased by 36.9% to reach
QR117,850 million, while total expenditures increased by 26.4% to reach
QR84,900 million, resulting in a large surplus of QR32,950 million. Oil prices recorded
an increase of 28.0% during the fiscal year 2007/08 and averaged $79.5 p/b,
compared to an average of $62.1 p/b during the fiscal year 2006/07. Oil production
averaged 836,000 bpd during the fiscal year 2007/08.

The State Budget for 2009/10 Allocated QR37.9 Billion for Major Public
Projects
2008/09 Budget
Preliminary data on government revenues and expenditures for the fiscal year
2008/09 released by the Ministry of Economy and Finance shows a record surplus
of QR38,856 million. Total revenues increased by 15.6% to reach QR136,278
million, while total expenditures increased by 14.7% to reach QR97,422 million. Oil
prices averaged $82.8 p/b during the fiscal year 2008/09 compared to $79.5 p/b
in 2007/08, while oil production averaged 826,000 bpd, with increased revenues
from gas, petrochemicals and investments.
2009/10 Budget
The 2009/10 State Budget which was announced in April 2009 continues to show
the government’s commitment to keeping major infrastructure and other projects
on track to meet the growing needs in the coming years. After four consecutive
fiscal years in which the State Budget showed a surplus, the 2009/10 State
Budget projected a deficit of QR5.8 billion, primarily due to the decline in oil prices,
restriction in oil production due to OPEC quotas, and the State’s commitment to
keep up capital expenditures. The 2009/10 Budget forecasts total revenues to
decline by 14.1% to QR88.7 billion, from QR103.3 billion in the preceding Budget
estimates, and total expenditures are forecasted to witness a marginal decline
of 1.4% to QR94.5 billion. The oil price assumption for the 2009/10 Budget is
$40 p/b, compared to $55 p/b in the 2008/09 Budget estimates.
The 2009/10 State Budget allocations for major public projects has declined by
6.4% to QR37.9 billion, compared to QR40.5 billion in the previous budget

Total Value of Shares Traded on the QE Declined by 49.0% during the First Half
of 2009
10. QATAR EXCHANGE

Qatar’s aim to create a world class financial center around a global exchange
took shape in June 2009 with the formation of the Qatar Exchange (formerly Doha
Securities Market). The Qatar Exchange (QE) is a strategic partnership between Qatar
Holding (investment arm of Qatar Investment Authority), which holds a 80% stake
and NYSE Euronext which holds a 20% stake. The QE will transition itself to NYSE
Euronext’s next-generation trading technology (Universal Trading Platform), and will
work with the regulators and market participants to diversify the products traded on
the exchange. The Qatar Financial Markets Authority (QFMA) is the regulatory and
supervisory authority of the Qatar Exchange.
During the first eight months of 2009, ‘Vodafone Qatar’ was listed on the Qatar
Exchange, taking the number of listed companies to 43, which include stocks in
the banking, insurance, services and industry sectors. In 2008, ‘Ezdan Real Estate
Company’, ‘Islamic Financial Securities Company’, and ‘Gulf International Services’
were listed on the Qatar Exchange. Currently, QE listed companies are required to
publish audited financial results annually, and also publish quarterly results. Seven
brokers have been licensed to trade on the market.
The total value of shares traded on the Qatar Exchange during the first half of
2009 declined by 49.0% to QR52.4 billion, compared to QR102.7 billion during
the first half of 2008 (Table 10.1). The value of shares traded in the Services
Sector represented 42.0% of the total value of shares traded on the QE during
the first half of 2009, while the Banking Sector represented 40.1%, with the
Industry Sector representing 16.4% and the Insurance Sector representing 1.5%.
In 2008, the total value of shares traded on the QE increased by 61.2% to reach
QR175.6 billion, compared to QR108.9 billion traded in 2007 (Figure. 10.1).
Table 10.1: % of Total

Sector (QR Million) 2007 2008 June 2008 June 2009
QE Value of Traded Shares (June 2009)
(2007 - June 2009)
Services 43,840.7 65,822.8 40,699.9 22,041.3 42.0%
Banking 45,474.2 78,647.3 46,122.5 21,012.2 40.1%
Industry 16,200.3 26,655.1 13,329.0 8,594.0 16.4%
Insurance 3,414.3 4,427.1 2,594.9 795.5 1.5%

Source: QE.
Total 108,929.5 175,552.3 102,746.3 52,443.0 100.0%
The GCC stock markets began a slight recovery in the first half of 2009, after the
earlier declines resulting from the impacts of the global economic and financial crisis.
Saudi Arabia’s TASI index was the best performer during the first half of 2009 with
an increase by 16.5%, followed by UAE’s ADI with a gain of 10.1%, UAE’s DFM
index which went up by 9.1%, Kuwait’s KSE index which rose by 3.8%, and Oman’s
MSM index which gained 3.1% (Table 10.2). Bahrain’s BAX index declined by 12.3%
during the first half of 2009, while Qatar’s QE index went down by 5.7%.
Table 10.2: 2007 2008 June 2009

GCC Stock Exchanges
Country (Index)
Market Market Market
% Change % Change % Change
Index Index Index
Bahrain (BAX) 2,755.27 24.2% 1,804.07 -34.5% 1,581.67 -12.3%
Kuwait (KSE) 12,558.90 24.7% 7,782.60 -38.0% 8,080.30 3.8%
Oman (MSM) 9,035.46 61.9% 5,441.12 -39.8% 5,612.21 3.1%
Qatar (QE) 9,580.45 34.3% 6,886.12 -28.1% 6,491.65 -5.7%
Saudi Arabia (TASI) 11,038.66 39.1% 4,802.99 -56.5% 5,596.46 16.5%
UAE (ADI) 4,551.80 51.7% 2,390.01 -47.5% 2,631.32 10.1%

Source: Reuters, Market Reports
and QNB Capital. UAE (DFMI) 5,931.95 43.7% 1,636.29 -72.4% 1,784.45 9.1%

QE Index Increased by 3.4% up to August 2009 to 7,117.25
Figure 10.1: 175,552

Value of QE Traded Shares
(QR Million) 108,929
78,647
74,937 45,474
35,295
65,823
43,841
26,455
26,655
16,200
10,849
4,427
2,338 3,414
2006 2007 2008
Source: QE.
Figure 10.2:
QE Index
11,053.1
9,580.5
7,133.0 7,117.3
6,886.1
6,493.6
Source: QE.
2004 2005 2006 2007 2008 Aug 2009

QE Market Capitalisation Increased by 9.5% up to August 2009 to reach
QR305.7 Billion
The QE market capitalisation increased by 9.5% during the eight months ended
August 2009 to reach QR305.7 billion ($84.0 billion), compared to QR279.0 billion as
at year-end 2008. The three largest companies on the QE by market capitalisation
as at August 2009, were Industries Qatar, QNB, and Q-Tel, representing 19.4%,
14.8% and 7.2% of the total market respectively. The following table shows share
prices and market capitalisation of listed companies as at August 2009.
Table 10.3: Price at Price at Capitalisation

Qatar Exchange Market Sector Listed Companies 31/12/2008 31/08/2009 at 31/08/2009
Capitalisation (QR) (QR) (QR Million)
Qatar National Bank 137.0 150.2 45,228
Commercialbank 88.3 73.0 15,806
Doha Bank 42.0 42.4 7,668
Qatar Islamic Bank 82.8 90.5 18,711
ahlibank 43.5 42.1 2,582
International Islamic 58.6 43.0 5,695
Masraf Al Rayan 11.0 12.1 9,075
al khaliji 7.2 14.9 5,364
First Finance 23.5 20.5 1,310
Total Banking Sector 111,440
Qatar Insurance Co. 51.5 66.8 4,965
Qatar General Insurance & Re-insurance Co. 91.3 55.0 1,407
Al-Khaleej Insurance Co. 37.1 32.9 468
Qatar Islamic Insurance Co. 37.0 31.1 467
Doha Insurance Co. 20.6 20.9 376
Total Insurance Sector 7,682
Qatar Navigation Co. 60.2 66.1 4,761
Qatar Cinema & Film Distribution Co. 45.4 33.0 86
Qatar Electricity and Water Co. 111.5 103.3 10,330
Qatar Shipping Co. 37.5 32.6 3,586
Qatar Real Estate Investment Co. 29.1 24.4 2,108
Medicare Group 9.1 9.2 259
Q-Tel 109.5 150.7 22,103
Salam International Investment 10.4 8.9 881
WOQOD 130.1 167.0 5,261
National Leasing 16.5 17.5 577
Meat & Livestock 8.7 13.4 241
Warehousing 19.5 16.6 415
Nakilat 21.6 25.3 14,168
Dlala 20.5 14.2 284
Barwa 30.3 35.1 9,214
Mannai 109.4 140.0 2,218
Aamal 41.0 27.6 10,474
Qatar Oman Investment Co. 8.6 8.2 246
Ezdan Real Estate Co. 27.0 35.6 16,266
Islamic Financial Securities Co. 48.0 34.6 138
Gulf International Services 20.5 31.6 4,271
Vodafone Qatar 8.9 7,524
Total Service Sector 115,410
Qatar National Cement Co. 79.8 84.5 3,772
Zad Holding Co. 40.8 51.0 467
Qatar-German Medical Co. 11.5 9.1 105
Qatar Industrial Manufacturing Co. 36.7 40.3 1,209
Industries Qatar 100.6 108.0 59,400
United Development Co. 35.3 38.4 4,118
Gulf Holding Co. 17.4 16.6 2,064
Source: QE.
Total Industrial Sector 71,135
Total Market 305,667

Net Profit of QE Listed Companies Stood at QR13.9 Billion for the First Half of
2009
Table 10.4:
Net profit for QE listed Net Profit
Companies (2007 - June 2009) (QR Million)
Company Name
2007 2008 June 2008 June 2009 % Change

Qatar National Bank 2,507.5 3,652.5 1,857.0 2,067.4 11.3%
Commercialbank 1,390.7 1,702.4 1,039.1 943.3 -9.2%
Doha Bank 926.5 946.5 579.3 646.3 11.6%
Qatar Islamic Bank 1,255.4 1,642.5 853.5 812.6 -4.8%
ahlibank 302.6 425.8 187.6 171.6 -8.5%
International Islamic 480.0 501.2 350.8 255.2 -27.2%
Masraf Al Rayan 1,079.6 917.0 250.1 386.5 54.5%
al khaliji 74.3 29.3 12.7 108.4 756.8%
First Finance Company 103.9 144.6 69.3 43.7 -37.0%
Banking and Finance Sector 8,120.5 9,961.8 5,199.4 5,435.1 4.5%
Qatar Insurance Co. 472.7 510.8 408.3 334.3 -18.1%
Qatar General Insurance & Re-insurance Co. 125.1 226.3 157.7 71.1 -54.9%
Al-Khaleej Insurance Co. 77.4 87.0 103.8 43.8 -57.8%
Qatar Islamic Insurance Co. 44.4 68.5 49.6 18.2 -63.4%
Doha Insurance Co. 44.3 47.2 36.1 25.6 -29.1%
Insurance Sector 763.9 939.8 755.6 492.9 -34.8%
Q-Tel 1,674.3 2,277.2 1,183.9 1,637.9 38.4%
Qatar Electricity and Water Co. 613.6 756.7 349.0 415.1 18.9%
Qatar Navigation Co. 437.9 569.4 398.2 347.6 -12.7%
Qatar Shipping Co. 610.6 517.9 375.0 158.6 -57.7%
Qatar Real Estate Investment Co. 299.7 311.4 173.0 113.0 -34.6%
Qatar Cinema & Film Distribution Co. 6.0 9.5 7.3 4.7 -36.3%
Medicare Group -24.2 19.2 24.8 -1.6 --
Salam International Investment 127.5 153.9 96.4 63.3 -34.3%
WOQOD 616.3 1,205.6 351.3 407.8 16.1%
National Leasing 54.8 55.1 31.3 24.0 -23.3%
Meat & Livestock 8.3 39.3 27.5 7.9 -71.1%
Warehousing 1.4 -16.5 1.8 3.0 63.9%
Nakilat 89.5 129.1 94.2 233.4 147.8%
Dlala 25.0 50.5 40.1 -9.9 --
Barwa 529.7 310.0 278.8 374.3 34.2%
Mannai Corp. 100.5 146.5 80.1 105.4 31.5%
Aamal Holdings 824.1 623.8 218.5 167.8 -23.2%
Qatar Oman Investment Co. 11.7 3.8 17.0 14.9 -12.6%
Ezdan Real Estate Co. 561.0 1,357.0 408.9 203.4 -50.2%
Islamic Financial Securities Co. 10.5 18.4 15.5 3.9 -74.8%
Gulf International Services -- 423.4 148.7 283.7 90.8%
Service Sector 6,588.5 8,968.9 4,321.2 4,558.1 5.5%
Qatar National Cement Co. 355.2 413.6 251.8 253.3 0.6%
Qatar Industrial Manufacturing Co. 115.6 188.4 80.1 80.9 1.0%
Zad Holding Co.. 21.5 47.7 46.2 46.3 0.2%
Qatar-German Medical Co. -1.1 6.8 7.8 -0.2 --
Industries Qatar 4,983.3 7,275.6 4,594.5 2,631.0 -42.7%
United Development Co. 339.6 583.5 99.2 325.0 227.7%
Gulf Holding Co. 31.5 34.1 43.5 58.8 35.1%
Industry Sector 5,845.5 8,549.6 5,123.2 3,395.2 -33.7%
Source: Annual Reports and
published financial statements. Total Market 21,318.4 28,420.1 15,399.5 13,881.4 -9.9%

Foreign Investors can Own Up to 100% in Certain Projects According to the
New Foreign Investment Law
11. Investment Incentives

Qatar welcomes foreign participation in joint ventures through technology supply,
market administration and equity participation. The Government offers several
attractive incentives for joint ventures, such as:
• Natural gas priced at $0.60-0.75 per mn Btu.
• Electricity at $0.0178 per Kwh.
• A developed infrastructure.
• Industrial land at a nominal rent starting at one Qatari Riyal per square meter
per year (Note: land rent can differ from area to area and also from the Public
and Private Sectors).
• No custom duties on imports of machinery, equipment and spare parts.
• No export duties.
• No taxes on corporate profits for pre-determined periods.
In addition to the above, the Government also offers the following incentives:
• No quantitative quotas on imports.
• No income tax on salaries of expatriates.
• No exchange control regulations - the Qatari Riyal is freely convertible at a
parity of US$1= Qatari Riyals 3.64; an exchange rate which has been stable
for over two decades.
• Excellent medical and educational facilities.
• Easy access to world markets with first class air and sea connections.
• Excellent telecommunications facilities.
• Liberal immigration and employment rules to enable import of skilled and
unskilled labour.
An Emiri decree was issued on 15th October 2000, which allows for foreigners
to own up to 100% in Hotels, Hospitals, Power Plants, Schools and Colleges.
However, the following features were considered in the New Foreign Investment
Law (No. 13) for the year 2000:
• Foreign investors are defined as non-Qatari persons, whether natural or juristic,
who invest their money in any of the projects in which direct investment is
permitted by the Government.
• Foreign investors may invest in all sectors of the national economy provided
they have one or more Qatari partners whose share shall not be less than
51% of the capital. It is however permissible by a decision from the Minister
of Economy and Commerce for foreign investors to exceed the percentage
of their participation up to 100% of the project’s capital in the sectors of
agriculture, industry, health, education, tourism and the development and
exploitation of natural resources or energy or mining.
• It is prohibited for foreign investors to invest in the sectors of Banking,
Insurance, Commercial Agencies and Real Estate (exception being the new
“Pearl of the Gulf Island”, “West Bay Lagoon” , “Al Khor Resort” projects and
areas specified under the new Lease Law).
• The Law offers several incentives for foreign investors including the allotment
of land through long term lease agreements for a period up to 50 years which
may be renewed.
• Foreign investors are permitted to perform whatever is required for the
establishment, operation and expansion of the project.
• The Ministry may grant foreign investors:
- Exemption from income tax for a period not exceeding ten years.
- Exemption from custom duties with regard to imported machinery and
equipment necessary for the establishment of the project.
- Exemption from custom duties with regard to primary or semi-manufactured
materials necessary for production, provided such materials are not
available in the local market.
• Foreign investors have the freedom to transfer investments to and from abroad
without delay.

The Qatar Science and Technology Park Sets Precedence for Free Zones in
Qatar
New Laws
Qatar’s efforts in attracting foreign investment has led to the promulgation of new
laws directed at creating a favourable business environment. The following new
laws were legislated since 2004:
• Labour Law (Law No. 14 of 2004).

• Property Law: Non-Qatari’s (Law No. 17 of 2004).
• Qatar Science and Technology Park Law (Law No. 36 of 2004).
• New QE Law (Law No. 13 of 2005).
• Qatar Financial Centre Law (Law No. 7 of 2005).
• Qatar Financial Markets Authority Law (Law No. 33 of 2005).
• Commercial Law (Law No. 27 of 2006).
• Telecommunications Law (Law No. 34 of 2006).
• Lease Law (Law No. 4 of 2008).
Qatar Financial Centre
The Qatar Financial Centre (QFC) opened its doors on May 1st 2005, under Law
No.7 of 2005, to attract international financial institutions and multi-national firms to
establish themselves in Qatar. Qatar’s vibrant economy and an estimated capital
investment programme of over $130 billion in the coming five years provides vast
opportunities for international financial institutions. The QFC has been designed
to attract the premier international financial institutions and corporations to share
in the wealth of Qatar and the region and to share in the vision of a long-term
mutually beneficial partnership with Qatar. The QFC provides a world-class
business environment for undertaking financial services and also promotes revenue
generating opportunities internationally. The QFC provides a familiar international
legal and business infrastructure that is seperate from the host Qatari systems.
The QFC is led by a commercial authority and a regulatory authority - the QFC
Authority and the QFC Regulatory Authority, that is independent from each other
and the government of Qatar. The QFC operates from their new building located
in the West Bay area, opposite the City Centre - Doha.
Qatar Science and Technology Park
The Qatar Science and Technology Park (QSTP) was set up to be an internationally
renowned centre for research excellence and commercialisation. The QSTP is
part of the Qatar Foundation and aims at being a home for technology-based
companies from around the world, and an ideal location for start-up companies.
The QSTP operates as a ‘free-zone’, providing favourable investment incentives and
access to world-class international research universities present at the ‘Education
City’. The QSTP has been successful in attracting leading world-wide business
establishments and current tenants include European Aeronautic Defence and
Space Company (EADS), ExxonMobil, Gartner Lee, Microsoft, Rolls-Royce, Shell
and Total.
Free Investment Zone
The Free Investment Zone (FIZ) is to be established in Qatar as per an official

government decree issued in September 2005. The new zone will allow businesses
to be 100% foreign owned and free from tax and duties for pre-determined
periods.

QNB’s Net Profit Increased by 11.3% during the First Half of 2009
12. Qatar National Bank

Qatar National Bank (QNB) was established in 1964 as the country’s first Qatari-
owned commercial bank, and has steadily grown to be the largest bank in Qatar
with 55 local branches and offices and a well connected network of over 160
ATMs. The QNB Group and associates is now represented in Algeria, Bahrain,
France, Guernsey, Iran, Iraq, Jersey, Jordan, Kuwait, Libya, Luxembourg, Oman,
Palestine, Qatar, Singapore, Sudan, Switzerland, Syria, Tunisia, UAE, UK, and
Yemen. QNB subsidiary Ansbacher Holdings has an office at the Qatar Financial
Centre and provides a wide range of wealth management services in the region
and internationally.
In 2008, QNB’s strategic expansion into the Middle East and North Africa Region
saw it acquire a 24% stake in the UAE-based Commercial Bank International and a
50% stake in the Tunisian-Qatari Bank. Further, QNB’s stake in Jordan’s Housing
Bank for Trade and Finance was increased to 33%. Additionally, QNB established
a full service branch in Singapore, while QNB Al Islami opened its first international
branch in Sudan. QNB’s European operations were restructured in 2008 with the
London branch having overall responsibilities. Going forward, QNB’s European
operations will be strengthened through the opening of a new branch in Geneva,
Switzerland wholly dedicated to private banking.
In 2008, QNB opened two Corporate Branches wholly dedicated to its corporate
customers. QNB’s Main Branch now serves as the headquarters for its Corporate
Banking service activities. QNB was the first bank in Qatar to offer its corporate
banking customers dedicated SWIFT access. QNB continues to play its role
as mandated lead arranger in major projects and syndications in Qatar and the
region. In 2008, it was the mandated lead arranger for what will be Qatar’s largest
integrated power and water plant, the $3.3 billion Ras Laffan C Project. In 2008,
QNB launched its corporate advisory services through QNB Capital, located at the
Qatar Financial Centre.
In 2008, QNB started the implementation of a Branch Automation System that

automates cash processing duties and gives tellers more time to focus on providing
quality customer service.
During the first half of 2009 QNB’s Net Profit increased by 11.3% to reach QR2,067
million, compared to QR1,857 million achieved during the first half of 2008 (Table
12.1). In 2008, QNB’s financial performance enabled it to rank among the top three
banks in the GCC Region with a Net Profit increase of 45.7% to reach QR3,653
million ($1,003 million). Total assets increased by 32.9% in 2008 to reach QR152.0
billion, compared to QR114.4 billion in 2007. Loans and Advances increased by
51.4% to reach QR100.1 billion, while Customer Deposits (including unrestricted
investment accounts) reached QR104.3 billion. Total shareholders’ equity as at
year-end 2008 totalled QR16.6 billion. QNB’s earnings per share reached QR15.4
in 2008, compared to QR11.0 in 2007.
Table 12.1: (QR Million) 2006 2007 2008 June 2008 June 2009
Qatar National Bank, Summary:
(2006 - June 2009)
Operating Income 2,701 3,722 5,540 2,492 2,944
Net Profit 1,998 2,506 3,653 1,857 2,067
Total Assets 71,663 114,361 151,974 152,640 147,115
Total Deposits 55,767 79,364 104,253 98,524 102,823
Total Loans and Advances 46,227 66,064 100,053 84,285 82,898
Source: QNB Annual Reports.

Total Shareholders’ Equity 8,457 13,858 16,643 18,982 17,725
Earnings per Share (QR) 11.7 11.0 15.4 6.3 6.9
In 2008, Global Finance and The Banker recognised and awarded QNB as the
“Best Bank in Qatar”.
QNB’s exceptional performance and industry leadership was also recognised by

leading international rating agencies such as Moody’s, Standard and Poor’s, Fitch
and Capital Intelligence, who have assigned QNB with the highest bank ratings in
Qatar as listed in the following page.

QNB is the Highest Rated Bank in Qatar
QNB Ratings
QNB is the highest rated bank in Qatar with the widest coverage and currently has
a rating from Fitch, Capital Intelligence, Standard and Poor’s and Moody’s.
Table 1: Foreign Currency Financial Strength Support Rating Outlook

Capital Intelligence
Credit Ratings for QNB
Long-Term Short-Term
Source: Capital Intelligence. AA- A1+ A+ 1 Stable
On June 4th, 2008, Capital Intelligence raised QNB’s long-term foreign currency
rating to AA-, from A+, short-term foreign currency rating to A1+ from A1, and
had a positive outlook on QNB’s financial strength ratings. Capital Intelligence
mentioned that the upgrade reflects the bank’s leading position in a fast growing
and diversifying economy. Capital Intelligence also stated QNB’s operating profit
benefited from sound control of costs in an inflationary environment. Going
forward, QNB’s investment in expanding its international network and activities
should contribute to lifting the Group to the next level as a powerful regional player.
Capital Intelligence currently gives QNB the highest rating in Qatar, with a long-
term foreign currency deposit rating of ‘AA-‘, and a support rating of ‘1’ (Table 1).
Table 2: Bank Credit and Deposits Outlook

Standard and Poor’s Credit
Ratings for QNB
Long-Term Short-term
Source: Standard and Poor’s. A+ A1 Stable
On May 14th, 2007, Standard and Poor’s raised QNB’s long-term counterparty
bank credit and deposit rating to ‘A+’, from ‘A’ (Table 2). Standard and Poor’s
stated that the ratings reflect QNB’s strong financial performance, amid economic
momentum in the country. Overall the leading domestic position of QNB in Qatar,
allows it to mitigate risks linked to the restricted playing field of the non-oil private
sector and to maintain healthy operating profitability.
Table 3: Long-Term Short-Term Support Individual

Fitch Credit Ratings for QNB
Source: Fitch. A+ F1 1 B/C
On November 15th, 2006, Fitch upgraded QNB’s long term rating to A+, from A
(Table 3), affirming all other ratings. Fitch mentioned that the upgrade in the ratings
reflects the support by the Qatari authorities. Fitch also mentioned that QNB’s
individual rating takes into account the bank’s well established and dominant
domestic franchise and a track record of strong financial performance.
Table 4: Bank Deposits Financial Strength Outlook

Moody’s Credit
Ratings for QNB
Long-Term Short-Term
Source: Moody’s. Aa3 P-1 C- Stable
On October 9th, 2006, Moody’s upgraded QNB’s long-term foreign currency bank
deposit ratings to Aa3, from A1, and QNB’s short-term foreign currency bank
deposit ratings to P-1 from P-2 (Table 4). Moody’s mentioned that the ratings were
set at the country ceiling and that the action recognises the bank’s importance
within the domestic banking system.

APPENDIX Qatar Statistical Summary
1
The Economy
2004 2005 2006 2007 2008
(QR Million)
GDP (nominal) 115,512 154,564 206,644 259,411 365,483
% Change 34.8% 33.8% 33.7% 25.5% 40.9%
Inflation Rate 6.8% 8.8% 11.8% 13.8% 15.1%
Exchange Rate ($:QR) 3.64 3.64 3.64 3.64 3.64
Total Exports (fob) 68,013 93,774 123,945 152,953 205,997
Total Imports (fob) (19,691) (32,992) (53,911) (72,158) (91,492)
Balance of Trade 48,322 60,782 70,034 80,795 114,505
Current Account Balance 27,489 27,235 34,430 38,024 57,802
Capital & Finance Account Balance (13,194) (10,915) (14,630) 8,070 (8,272)

Authority and Qatar Central Bank. Overall Balance 14,295 16,320 19,800 46,094 49,530
2
Public Finance 2006/07 2007/08 2008/09 2008/09 2009/10
(QR Million) Actual Actual Prelim. Budget Budget
Government Revenue 86,063 117,850 136,278 103,300 88,700
Government Expenditure 67,147 84,900 97,422 95,900 94,500
Budget Surplus/(Deficit) 18,916 32,950 38,856 7,400 (5,800)
Source: Ministry of Economy

and Finance.
Budget Surplus/Deficit as % of GDP 9.2 12.7 10.6 -- --
3
Oil and Gas 2004 2005 2006 2007 2008
Oil Production (000 bpd) 759 779 810 819 837
Price per Barrel ($) 35.2 51.7 62.9 70.0 95.2
Source: Middle East Economic

Survey, Qatargas, and RasGas.
LNG Exports (mtpa) 18.4 22.2 25.1 27.4 30.4

APPENDIX Qatar Statistical Summary
4
Monetary Survey June
2005 2006 2007 2008
(QR Million) 2009
Currency in Circulation 2,866 3,959 4,487 5,368 5,543
Demand Deposits 22,791 29,533 36,250 45,502 45,909
Narrow Money Supply (M1) 25,657 33,492 40,737 50,870 51,452
% Change M1 56.7% 30.5% 21.6% 24.9% 1.1%
Savings and Time Deposits 28,409 39,622 64,349 85,676 112,019
Foreign Currency Deposits 24,835 37,059 48,650 47,459 24,704
Quasi-Money 53,244 76,681 112,999 133,135 136,723
Money Supply (M2) 78,901 110,173 153,736 184,005 188,175
Source: Qatar Central Bank. % Change M2 42.9% 39.6% 39.5% 19.7% 2.3%
5
Deposits of Commercial Banks June
2005 2006 2007 2008
(QR Million) 2009
Private Sector Deposits:
Demand Deposits in Qatari Riyals 16,977 23,133 30,242 36,715 39,518
Time and Saving in Qatari Riyals 26,045 34,761 55,854 71,091 85,228
Demand Deposits in Foreign

2,706 4,189 4,079 6,160 6,311
Currencies
Time and Saving in Foreign Currencies 7,147 14,323 12,427 8,250 7,852
Total Private Sector Deposits 52,875 76,406 102,602 122,215 138,909
Public Sector Deposits:
Demand Deposits in Qatari Riyals 5,793 8,884 8,977 10,885 8,088
Time and Saving in Qatari Riyals 7,031 8,461 9,731 18,209 36,341
Demand Deposits in Foreign

5,123 6,296 9,924 15,639 9,322
Currencies
Time and Saving in Foreign Currencies 13,809 19,256 31,608 31,103 11,109
Total Public Sector Deposits 31,756 42,898 60,240 75,835 64,860
Non-Resident Deposits 769 1,155 4,365 14,429 18,162
Source: Qatar Central Bank. Total Commercial Banks Deposits 85,400 120,459 167,207 212,479 221,931

QNB Branches and Offices
Head Office
P.O.Box 1000, Doha, State of Qatar

Tel. (+974) 440 7407, Fax (+974) 441 3753
Website www.qnb.com.qa, E-mail ccsupport@qatarbank.com
Branches
Air Force Base Mesaieed
Al Gharrafa Musheireb
Al Khor Qatar Foundation
Al Rayyan Qatar University Ladies Campus
Al Sadd Qatar University Men’s Campus
Al Sadd-Ladies Qtel
Al Shamal Ras Laffan Industrial City
Al Wakra Salwa Road
C-Ring Road Shahaniya
City Center-Doha Sharq Village & Spa
Doha Marriot Gulf Hotel Sheraton Doha Hotel & Resort
Exhibition Centre The Mall
Industrial Area The Ritz-Carlton Doha
Grand Hamad West Bay
Hamad Medical Hospital
QNB Al Islami
Al Gharrafa Industrial Area
Al Khor Salwa Road
Al Rayyan Hamad Medical Hospital
Al Wakra Qatar Olympic Committee Building
C-Ring Road - Corporate Branch General Retirement and Pension Authority
Grand Hamad Street
Offices
Airport Departures Terminal Q-Post
Ministry of Education RasGas
Muwasalat RasGas (Al Dana Tower)
Qatargas Souq Waqif
Qatar Petroleum - Head Office Urban Planning
Qatar Petroleum - Al Sadd
24-Hour Call Center 440 7777
Branches can be contacted through the Call Center

QNB Group Subsidiary / Associate Companies
QNB International Branches Libya

and Representative Offices: (Representative Office)
Burj Al Fatah – 19th Floor
United Kingdom P.O. Box: 91351 Tripoli - Libya
51 Grosvenor Street, Tel: (+218) 213362131 / 2
London W1K 3HH Fax: (+218) 213362134
Tel: (+44) 207 647 2600, Fax: (+44) 207 647 2647 QNBLibya@qnb.com.qa
QNBLondon@qnb.com.qa
QNB Subsidiary / Associates:
France
65 Avenue d’lena Iraq
75116 Paris Mansour Bank
Tel: (+33) 1 53 23 0077, Fax: (+33) 1 53 23 0070 Associate Company
QNBParis@qnb.com.qa
P.O. Box: 3162
Al Alawiya Post Office
Kuwait
Al Wihda District Baghdad - Iraq
Al-Arabia Tower, Ahmad Al-Jaber Street. Sharq
Area Tel: (+964) 1 7175586, Fax: (+964) 1 7175514
P.O. Box: 583
Dasman 15456 Kuwait Jordan
Tel: (+965) 2226 7023 The Housing Bank for Trade
QNBKuwait@qnb.com.qa and Finance (HBTF)
Associate Company
Oman P.O. Box: 7693
Qatar National Bank Building Postal Code 11118 Amman - Jordan
MBD Area - Matarah / opposite to Tel: (+962) 6 5200400, Fax: (+962) 6 5678121
Central Bank of Oman
P.O. Box: 4050 Qatar
Postal Code: 112, Ruwi Al Jazeera Islamic Company
Tel: (+968) 24783555, Fax: (+968) 24779233 Associate Company
QNBOman@qnb.com.qa P.O. Box: 22310 Doha - Qatar
Tel: (+974) 4682812, Fax: (+974) 4682616
Sudan
Africa Road – Amarat Street No. 9 Switzerland
P.O. Box: 8134 QNB Privée Suisse
Tel: (+249) 183-480000 Subsidiary
Fax: (+249) 183- 486666 Geneva (Under Establishment)
October 2009
Singapore
One Temasek Avenue Syria
22-03 Millenia Tower QNB Syria
Singapore 039192 Associate Company
Tel: (+65) 6499 0866, Fax: (+65) 6884 9679
Damascus (Under Establishment)
QNBSingapore@qnb.com.qa
November 2009
Yemen
Tunisia
Qatar National Bank Building
Al-Zubairi Street Tunis Qatari Bank
P.O. Box: 4310 Sana’a - Yemen Associate Company
Tel: (+967) 1 517517, Fax: (+967) 1 517666 Rue de la cité des sciences
QNBYemen@qnb.com.qa B.P 320 – 1080 Tunis Cedex
Tel: (+216) 71713555, Fax: (+216) 71713111
Iran www.tqb.com.tn
(Representative Office)
6th floor Navak Building UAE
Unit 14 Africa Tehran - Iran Commercial Bank International p.s.c
Tel: (+98) 21 88 889 814 Associate Company
Fax: (+98) 21 88 889 824 P.O. Box: 4449, Dubai, Al Riqqa Street, Deira
QNBIran@qnb.com.qa Tel: (+971) 042275265, Fax: (+971) 04 2279038


Qatar Economic Review October 2009

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Qatar Economic Review October 2009

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Qatar Economic Review OCTOBER 2009

Qatar Economic Review is distributed on a complimentary basis to valued business

Overview of the State of Qatar 06

The Economy of Qatar 10

Key Economic Sectors 14

Domestic Credit Facilities 43

Qatar National Bank (QNB) 53

QNB CAPITAL LLC

© QNB Qatar Economic Review

4 Qatar economic review

Sovereign Ratings: State of Qatar

Table 1: Foreign Currency Local Currency Outlook

Table 2: Government Bonds Foreign Currency Outlook

Table 3: Foreign Currency Local Currency Outlook

Table 4: Sovereign Moody’s Standard and Poor’s Fitch Capital Intelligence

Kuwait Aa2 AA- AA AA-

Qatar Aa2 AA- N/R AA-

Qatar economic review 5

1. Overview of the State of Qatar

Qatar is an independent state in the Southern Arabian Gulf surrounded by Saudi

Table 1.1: 2004 Census 2008 Survey

Doha 339,847 45.7% 779,645 50.2%

Al Rayyan 272,860 36.7% 395,887 25.5%

Al Khor 31,547 4.2% 180,893 11.7%

Al Wakra 31,441 4.2% 105,392 6.8%

Al Daayen 31,814 4.3% 40,791 2.6%

6 Qatar economic review

Table 1.2: 2004 Census 2008 Survey

Males 496,382 66.7% 1,203,363 77.5%

Females 247,647 33.3% 349,457 22.5%

Population by Age Groups

15-19 42,191 45,071 60,545

20-24 59,567 81,828 197,720

25-29 84,053 109,125 292,648

30-34 94,809 108,854 217,625

35-39 85,397 95,028 186,225

40-44 75,877 82,762 132,322

45-49 59,119 63,786 108,417

50-54 37,353 41,667 77,291

55-59 19,875 20,407 38,058

60+ 18,170 17,981 29,888

Qatar economic review 7

Economically Active Population by Gender

Table 1.4: 2004 Census 2008 Survey

Employer 2,932 61 2,993 2,300 46 2,346

Own Account 2,042 22 2,064 1,249 0 1,249

Employee 368,129 64,375 432,504 1,041,719 122,767 1,164,486

Economically Active Population by Economic Activity

Table 1.5: Economic Activity 2004 Census 2008 Survey

Fishing 1,825 3,638

Mining and Quarrying 17,997 60,100

Manufacturing 40,039 87,377

Electricity and Gas 4,364 7,643

Construction 117,049 544,644

Wholesale and Retail Trade 54,438 106,151

Hotels and Restaurants 10,280 23,992

Transport, Communication & Storage 15,218 53,465

Financial Intermediation 4,766 10,275

Real Estate, Renting and Related Activities 11,859 41,138

Public Administration 53,438 58,380

Education 19,877 31,679

Health and Social Work 11,554 28,505

Other Community Social Services 10,130 15,930

Domestic Services 53,356 79,007

Table 2.2: (QR Million) 2008* 2009 2010