QATAR - Qatar's Petrochemicals Sector.

By 2013, income from the natural gas sector and the petrochemicals business would be more than double of Qatar's oil revenue. The petrochemicals sector is controlled by the state-owned Qatar Petroleum (QP), whose JVs are to produce 6m t/y of ethylene by 2013, ethylene dichloride (EDC), polyvinyl chloride (PVC), vinyl chloride monomer (VCM), and propylene and polypropylene (PP).

In a partial privatisation of this business, Industries of Qatar (IQ) was set up in April 2003 as a holding group, with 15% of IQ's share capital of QR5,000m ($1,370m) offered in June 2003 in what then was Qatar's biggest IPO in four years. QP transferred to IQ its stakes in Qatar Petrochemical Co. (Qapco), Qatar Fertiliser Co. (Qafco), Qatar Fuel Additives Co. (Qafac) and Qatar Steel Co. (Qasco). Of the 15% IPO, 20% was reserved for three non-profit bodies - the Qatar Foundation, the Retirement Fund and the Ministry of Religious Endowments and Islamic Affairs.

The IPO, part a plan to distribute wealth and raise the private sector's profile, was managed by seven local banks. Qatari firms were allowed to buy shares after the IPO was closed, with priority given to individual investors. IQ was listed on the Doha Securities Market (DSM), and QP was advised by HSBC, Clifford Chance and Ernst & Young. IQ has a seven-member board appointed by QP, which provides assistance. QP will keep the majority in IQ for some time before selling parts of its stake in a pattern somewhat similar to privatisation of the Saudi Arabian Basic Industries Corp. (SABIC - see survey of Saudi Arabia to be serialised next month).