December 16th, 2010
03:47 PM GMT
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While the football world and all its fans were rightly focussed on Qatar 2022, a story kept on the boil by FIFA President Sepp Blatter, the tiny Gulf state announced a big milestone for the natural resource that made it famous - natural gas.

Seventy-seven million metric tons may not trigger alarm bells of excitement in the general public, but it certainly does within energy circles.

Qatar is two years ahead of schedule in hitting this annual target for liquefied natural gas, and is the largest exporter of LNG ahead of Southeast Asian stalwarts Malaysia and Indonesia.

It has a fleet of 54 super tankers hauling its products East and West. Qatar’s veteran energy minister, Abdullah bin Hamad al-Attiyah said that the fleet provides him with the ability to stay on top of a rapidly changing customer base. “We can today - because of our flexibility of products and transportation - reach any new customer, even the next day.”

Qatar has been a game changer in the market for this product and made a huge bet on the new technology to compress natural gas into liquid form when the Emir Sheikh Hamad Bin Khalifa Al-Thani took the reigns of power.

The milestone marked at the Qatari industrial city of Ras Laffan -– in the company of chief executives from Exxon Mobil, Royal Dutch Shell and ConocoPhillips –- comes during the same week that the Qatar Foundation announced the biggest sponsorship package in football history, signing on with Barcelona for a five year, $225 million deal.

It was the Emir’s roll of the dice on LNG technology, helped along in both technology and capital by the energy majors in Qatar, which allows for such high-profile investments.

How have times changed: The country was nearly bankrupt in the early 1990s when oil prices plummeted and Qatar was not a big enough player in the crude market to carry sway. It still ranks near the bottom, just above Ecuador in terms of OPEC rankings, but is third in natural gas reserves behind Russia and Iran. Iran may have problems securing investors for its South Pars field due to economic sanctions, but Qatar continues to produce at a record clip on its side of the same field. Minister Al-Attiyah said that he hopes to expand capacity by as much as 10 million tons in the near future.

To put this into perspective, the Persian Gulf state is producing the gas equivalent of five million barrels a day of crude. That is a handsome sum with a population of just 1.6 million people, 70 percent of them expats.

The minister tries to keep his feet on the ground despite all the fanfare surrounding the milestone. He is expressing concerns for example that oil prices are closer to $90 a barrel rather than $80 and that may dampen demand in 2011.

“I need a very strong consumer. If my consumer becomes weak, I will become weak too,” says Al Attiyah. Indeed higher prices may dent demand, but certainly not the new 77-million-ton giant.



December 16th, 2010
06:20 AM GMT
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(CNN) – As Australia nursed its wounds from a humiliating Dec. 7 cricket defeat at the hands of England in the second test of the 2010 Ashes tournament, the nation was soon buoyed by news that unemployment rates fell to 5.2%.

That struck a chord for Andrew Barrelle, a Sydney trader for Merrill Lynch. “I was sitting at my desk last Thursday afternoon when it seemed to click:  Australia started to do poorly in the Ashes since 2005, and it seemed to coincide when our economy started going up,” Barrelle said.

Jumping on his Bloomberg terminal, Barrelle compared UK and Australia unemployment rates to performance at the biennial Ashes test match series – and was shocked by how right his hunch proved: When England does well in the Ashes, unemployment there rises – and vice versa for Australia.

“I was surprised to the extent to which it’s matched, even the volatility matches,” Barrelle said.

So what does this mean? Barrelle estimates that, based on the historical record and current unemployment, England will win the series by 2-0 or 3-1. However, “a 3-0 or 4-0 result would spell real problems for the UK economy – a rise in unemployment by 1-2%,” Barrelle wrote in his subsequent research note.

Also - tongue firmly in cheek - Barrelle recommended “it is in the UK unemployed best interests” that England should take out star players Alastair Cook, Graeme Swann and Kevin Pietersen.

“The UK public should be thanking the bankers and Gordon Brown for their recent ashes success,” Barrelle concluded.

Barrelle’s work joins the pantheon of unusual economic indicators, such as the Super Bowl Indicator (if the team that wins was an original member of the National Football League, the market will go up for the year; if from the old American Football League, the market will go down).

Or the Sports Illustrated Swimsuit Issue Indicator – if the cover model is from the U.S., the S&P 500 will outperform for the year; if the model is non-American, the S&P will underperform. Both indicators, though random, are surprisingly accurate over time.

Does Barrelle think there is a real link between Ashes success and poor economic performance? “I think it’s a coincidence, a bit of fun … but it holds up reasonably well,” Barrelle said.

That could be good news for England as it begins its third test Ashes play in Perth Thursday – UK unemployment rose unexpectedly to 7.9% in the third quarter, government figures showed Wednesday. (True to form, by lunch Thursday Australia was down 4-65).



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