The news of Qatar withdrawing from OPEC starting on January 1 came up amid disputes between participants of the UN climate summit in Katowice. According to Polish President Andrzej Duda, Poland cannot give up coal mining while, ecologically, natural gas is a much safer resource.
Sputnik has spoken to energy expert Andrzej Szczęśniak to find out how Qatar’s decision is going to affect the oil and gas market, especially Poland.
Andrzej Szczęśniak: Regardless of what Qatar says, I consider this decision to be more political and strategic rather than technical. At the moment, Doha is in a situation where it is the enemy and the object of attacks and pressure from Saudi Arabia, which is OPEC’s largest member. Qatar is not a significant producer of crude oil, that’s why it’s leaving.
Today OPEC has already entered a much higher level, I call it OPEC-plus, where only strong players, like Saudi Arabia or Russia, matter; and the rest of the players just play a microscopic role. The strategic processes on the global oil market now depend on the decisions taken by the two most important players in world oil exports, namely Saudi Arabia and Russia. If they agree on a strategy, then such a decision matters.
Sputnik: What does this mean specifically for Poland?
Andrzej Szczęśniak: Qatar’s decision doesn’t mean anything to us. Poland has been buying LNG from Qatar and will go on doing that.
Sputnik: Poland is very interested in diversification of gas supply, and intends to implement the Baltic Pipe project in cooperation with Denmark and Norway. The global media, but not Polish ones, report that Norway’s and the North Sea’s gas resources are not very large. What does Warsaw think about this?
Andrzej Szczęśniak: Firstly, it is a gas that is already running out, that is, extraction has reached its peak and, according to official Norwegian forecasts, will drop in two or three years. It seems to me that this pipeline is not justified economically and geologically. There are not much gas resources that it would reach, so the Baltic Pipe pipeline is for now in its initial phase with rather small or even microscopic chances of being implemented. For many years I have been criticising this policy as a policy that is not based on economy at all.
Besides, in this part of Europe we have the dominance of Russian gas that is rather cheap, and easy to get, which is extremely important in winter times. By using the word “diversification” Poland actually wants to move away from Russian gas, and turn to some other producers, like Qatar or the United States. Gas from there is going to come to come to Poland in huge quantities, thus replacing Russian gas; however, it’s going to be much more expensive and will put more pressure on the pocket of the average Polish resident and Polish enterprises.
They all prefer Russian gas, which is cheaper and much more reliable. That is why we are seeing competition with Germany, which is working on the construction of Nord Stream-2 together with Russia. Meanwhile, the perspectives of the Baltic Pipe gas pipeline are very uncertain; after three years it is still in the initial design and arrangement phase. Unfortunately there are no specifics about the project. So in my opinion, this project will not be created, its chances are minimal.
Sputnik: For many years, Poland has been buying natural gas from Russia under the Yamal contract, which is expiring in 2022. Is it possible that Poland will completely end the supply of Russian gas?
Andrzej Szczęśniak: It is virtually impossible to give up the raw material from Russia, because this part of Europe, including Germany and all of southern Europe, is a zone of Russian gas; and they take advantage of its geographic proximity and reliability. In my opinion, this diversification project is more about having such players as the United States or Qatar on the Polish market. However, I’m sure they won’t be able to replace Russia.
The economy is working here and there is no strength to eliminate the cheapest product on the market, unless someone (in Washington) introduces sanctions, against Russian oil and gas similar to those against Iran.
The views expressed in this article are solely those of Andrzej Szczęśniak and do not necessarily reflect the official position of Sputnik.