We should look carefully at Monday’s announcement that Qatar’s state-owned petroleum company, Qatar Petroleum, has signed a major deal with U.S. energy company ExxonMobil.
Reuters reports that the deal will give Qatar Petroleum a “30 percent stake in two of Exxon’s affiliates in Argentina, giving [Qatar Petroleum] access to oil and gas shale assets in the Latin American country.”
No problem there.
Except that this expansion will give Qatar Petroleum a major footprint in an evolving marketplace, shale development, at prospectively lower costs than the U.S. Why lower costs? Because as Qatar’s truly absurd hosting of the 2022 World Cup has proven (yes, FIFA is to private business what Venezuelan President Nicolas Maduro is to government), slave labor is cheaper than paid labor. This deal gives Qatar the potential to reduce the dominant U.S. market position in shale-based energy production.
But there’s another more important concern for the U.S. here: where Qatari officials might allocate some of the revenues from their new Latin American shareholdings.
This matters in that Qatar has a rather deep and problematic penchant for throwing multiple million dollar stacks at terrorist organizations including the Islamic State, al Qaeda, and Hamas. But the concern is especially pointed in this scenario because the northeast Argentina border with Brazil and Paraguay is a hotbed of Iranian-aligned terrorist interests. Both the Iranian Islamic Revolutionary Guard Corps and the Lebanese Hezbollah retain a significant operational presence here. And their activities include criminal smuggling operations centered on drugs and money laundering, but also the facilitation of global cover and movement for their terrorists.
In short, any money flowing to these areas is a problem.
But now retaining a multimillion dollar stake in energy production assets, assets that will generate revenue, Qatar Petroleum employees who are predisposed to groups in the triborder area will have a means to facilitate their funding and/or laundering activities more easily. Corporate cover makes it easier to help terrorist friends get ahead.
As I say, there are prima facie counterterrorism concerns here. ExxonMobil better ensure its affiliates have strong oversight structures in place.
