UAE URGES OPEC TO DECLARE PLANS OF CUTTING PRODUCTION
Abu Dhabi: The UAE energy minister urged Opec (Organisation of the Petroleum Exporting Countries) members to inform their customers about their plans of cutting production in line with the decision taken at the Opec meeting in Vienna on November 30. Opec members agreed last month to slash production by 1.2 million barrels per day in order to prop up oil prices.
“As you saw the GCC [Gulf Cooperation Council] companies announced to the consumers that they are about to reduce (production) and we call on all Opec members that committed to the cuts to take the same steps and inform markets and buyers about the reduction,” Suhail Al Mazroui told reporters in Abu Dhabi on the sidelines of a Ministry of Energy event on Thursday. Asked whether the UAE is mulling further production cuts to support oil prices after Saudi Arabia signalled that it is ready to cut production more than expected, Mazrouei said it’s “too early to speak” about taking additional steps.
“We took a decision already and we are committed to that decision. We don’t want to jump ahead by talking about additional steps (cuts),î he said. On the impact of the Opec decision on oil markets, he said the decision will be positive in creating correction in the markets. “When the market sees that the deal is in effect and they see the impact ithas on reducing the oil surplus, we expect this to be positive in creating correction in the market.”
Oil companies from the Gulf said last week that they are slashing supplies in a sign of compliance with the Opec agreement. Abu Dhabi National Oil Company [Adnoc] has announced that it is planning to reduce crude supplies by 3 to 5 per cent from January, Saudi Arabia, Qatar and Kuwait have also announced cuts and plan to inform customers about their decision in the coming days. Other members who are part of the deal are yet to make announcements on their plans to cut production.
IRAN TO PAY HALF OF THE ANNOUNCED PRICE FOR 80 NEW BOEING AIRCRAFT
DUBAI: Iran said it had negotiated to pay only about half the announced price for 80 new Boeing airliners in an order that the American plane maker had said was worth $16.6 billion. Boeing and its European rival Airbus have both signed huge contracts this month to supply airliners to Iran, the first such deals since international sanctions were lifted under a deal to curb Tehran’s nuclear program.
Replacing Iran’s antiquated civil aviation fleet is one of the biggest economic opportunities of the 2015 accord to lift sanctions, which was negotiated by the outgoing administration of US President Barack Obama. President elect Donald Trump is a vocal critic of the pact.
Despite Iran’s great need for new planes to replace those from the sanctions era, it has entered the market at a time when Boeing, Airbus and smaller plane makers have all faced a downturn in orders, and are therefore expected to offer deep discounts. Boeing said this month it was cutting production of its 777 long-haul jet due to a drop in demand.
“Boeing has announced that its Iran Air contract is worth $16.6 billion. However, considering the nature of our order and its choice possibilities, the purchase contract for 80 Boeing aircraft is worth about 50 per cent of that amount,” said Deputy Transport Minister Asghar Fakhrieh-Kashan, quoted by Iran’s IRNA state news agency.
Airbus’s contract to sell 100 jets to Iran Air, would be worth $18-$20 billion at list prices, but the head of Iran Air has been quoted as saying the value of the contract would not exceed $10 billion. The government of President Hassan Rouhani has pushed to finalise aircraft deals to show results from the nuclear accord with world power to end sanctions. He faces criticism at home from hardliners over the cost of the purchases.
Kuwait: Iraq said most international oil companies working in the country, along with the semi-autonomous region of Kurdistan, have agreed to cut crude output to fulfil an Opec accord.
Iraq is fully committed to delivering on Opec’s November 30 agreement to reduce supplies, Oil Minister Jabbar Al Luaibi said on Thursday in Cairo at a meeting of the Organisation of Arab Petroleum Exporting Countries, known as OAPEC. “Kurdistan is within Iraq and we are in agreement,” said Al Luaibi.
The Kurdistan Regional Government, which accounts for about 12 per cent of the nation’s output, said on December 5 it didn’t expect to make significant output cutbacks to fulfil the Opec accord. The KRG didn’t immediately respond when asked for comment. Genel Energy Plc and Gulf Keystone Petroleum Ltd., which operate in the region, declined to comment, while DNO ASA, which also produces there, didn’t immediately respond.
IRAN TO BUY 100 NEW AIRBUS AIRCRAFT
PARIS: Airbus signed a firm contract on Thursday for the sale of 100 aircraft to Iran Air, as Tehran and Western companies race to reopen trade almost a year after sanctions against Iran were lifted. Airbus said the contract, which Iran flagged earlier this week, covered 46 Airbus A320 planes, 38 A330 planes and 16 A350 XWB aircraft, with deliveries due to begin in early 2017.
The head of Iran Air was quoted on Sunday as saying the value of the contract would not be more than $10 billion.
“This is a landmark agreement not only because it paves the way for Iran Air’s fleet renewal,” said Fabrice Bregier, Airbus President and Chief Executive Officer. “Our overall accord includes pilot training, airport operations and air traffic management so this agreement is also a significant first step in the overall modernisation of Iran’s commercial aviation sector,” he added.
The timetable suggests the first Airbus A321 could arrive before the January 20 inauguration of US President-elect Donald Trump, who has opposed the deal to lift most sanctions on Iran in exchange for curbs on its nuclear activities, and well ahead of Iranian presidential elections in May next year.
Airbus shares were down 0.8 per cent in mid-session trading, with the stock up by around 1 per cent since the start of 2016.
The deal, part of plans to renew the airline’s decaying fleet, comes against a backdrop of criticism by conservatives in Washington and Tehran of last year’s international agreement to allow such business after decades of sanctions.
DUBAI CHAMBER LINES UP FIVE NEW INITIATIVES IN 2017
Dubai: Dubai Chamber of Commerce and Industry will launch five new initiatives in 2017 to boost start-ups and entrepreneurs, while efforts to foster innovation and develop Dubai’s entrepreneurial ecosystem will remain a major priority for the chamber, a senior official said .
“With the UAE’s focus on instilling a spirit of innovation and entrepreneurship among young people under the directives of our wise leadership, Dubai Chamber is committed to supporting Dubai’s entrepreneurial community, as their success is essential to the growth of the emirate’s private sector and the wider economy,” said Eisa Al Za’abi, Senior Vice-President, Institutional Support Sector, Dubai Chamber, and General Coordinator of Tejar Dubai.
The Dubai Chamber has stepped up its efforts to support the growth of startups and entrepreneurs in 2016 through a number of successful initiatives under the Tejar Dubai entrepreneurship development programme, as well as the Dubai Start Up Hub platform and the Dubai Smartpreneur Competition.
Tejar Dubai received 28 business ideas over the course of the year, of which 14 were approved by a panel of judges. Nine commercial projects were launched during the same period, bringing the total number of businesses established to date to 25. Under the programme, 20 workshops and training sessions were held in 2016, attracting 800 participants.
Since its launch in 2013, Tejar Dubai has helped secure Dh10 million in funding for programme participants through partnerships and agreements with banks and financial institutions.
CURRENCY STRENGTH MAY HINDER GCC’S ECONOMIC DIVERSIFICATION EFFORTS
Dubai: A sharper rise in US interest rates is expected to manifest in dollar strength effectively reflecting in the appreciation of GCC currencies, impacting competitiveness of many sectors such as trade, tourism, hospitality and real estate.
The impact on exchange rates may be cause for concern for GCC according to analysts. “Beyond funding-cost considerations, higher US rates are likely to impact the GCC via further strengthening of the dollar, which we expect will make new highs. The dollar appreciation would lead to further real appreciation in the GCC’s pegged currencies, reducing their competitiveness and increasing their purchasing power abroad,” said Carla Slim, an economist at Standard Chartered.
Strengthening of local currencies could encourage capital outflow as regional investors seek to diversify their portfolios internationally through purchase assets abroad. The Saudi Arabian riyal (SAR) and the UAE dirham have both appreciated by about 10 per cent in real terms since end-2014. The Kuwaiti dinar (KWD) has appreciated by 7.5 per cent during the same period.
The real effective exchange rate of GCC currencies has already appreciated and are expected to appreciate further. While the region’s goods export base outside of oil and oil-related goods is quite narrow, nonetheless services exports may deteriorate as a result of the strengthening in the currencies. This is most relevant for the UAE where services export receipts stand at around 7 per cent of GDP.
On a positive note, strengthening currencies will reduce cost of imports, thereby improving the terms of trade. Strengthening terms of trade are generally a good thing for an economy as they imply a higher standard of living and stronger economic growth, particularly where economic inputs are largely imported. They also imply lower inflationary pressures as the imported basket of consumption will see price deflation. In the GCC, where a large percentage of domestic consumption is import dependent, this effect is significant.
BOEING, MUBADALA AIM TO BOOST UAE AEROSPACE INDUSTRY
Abu Dhabi: Aircraft manufacturer Boeing announced that the Boeing-Mubadala Co-op internship programme is on course to provide aerospace engineering expertise to bolster the UAE’s aviation capabilities.
The programme was launched by Boeing and Mubadala in 2015 to support the development of a sustainable aerospace industry in the UAE. Sixstudents have graduated from the programme to date, and 10 Emiratistudents will join in August 2017. The 18-week programme includes professional development activities designed to build the students’ network and broaden their exposure to Boeing and aerospace engineering.
SWEDISH PM TO LEAD TRADE DELEGATION TO IRAN
TEHRAN – Swedish Prime Minister Stefan Lôfven, leading a trade delegation, is due to visit Tehran in February 2017, Sweden’s ambassador in Iran, Helena Sangeland.
In a meeting in Tehran with the chairman of Iran Chamber of Commerce, Industries, Mines and Agriculture (ICCIMA), Gholam-Hossein Shafeie, the Swedish envoy expressed her country’s willingness to expand mutual cooperation with Iran, saying, “Sweden puts great importance on ties between the two countries.”
Referring to opportunities created after the lifting of sanctions on Iran, the Swedish official noted that the two countries exchanged several delegations and held official meetings over the past year, the ICCIMA website reported.
The resumption of Sweden’s economic center activities in Tehran has created an opportunity for small and medium sized enterprises to make investment and launch joint ventures in Iran,” she said.
Both officials also stressed the need for removing banking barriers to help boost the trade between the two countries.
Earlier this month, Presidential Chief of Staff Mohammad Nahavandian met members of the International Council of Swedish Industry (NIR) to exchange views on promoting economic ties. In the meeting, Nahavandian described Iran’s economy as an opportunity for the members of the Swedish council, ISNA reported. The Iranian official called on Swedish companies to get more engaged with Iran’s private sector, stressing that the country’s private sector is increasingly involved in the economy.
IRAN’S INDUSTRIAL EXPO IN IRAQ
TEHRAN -Iran’s 3rd specialized exhibition of industrial equipment and production lines’ machineries, which was due to be held in Baghdad International Fairgrounds in mid January, is rescheduled for mid February.
According to the Public Relations Department of Trade Promotion organization of Iran (TPO), the exhibition will be held from February 12 to 15. The exhibit will provide Iranian private sector’s industrialists the opportunity to showcase their products and services to the Iraqi customers.