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5th Sep, 1999

  1. International
  2. Finance
  3. Industry
  4. Policy
  5. Trade
  6. Gulf

Bahrain seeks buyers for $458mln plant

Bids from two groups were due to be submitted on Wednesday to buy and operate a $458 million power and water desalination plant being built in Bahrain, industry sources said.

They said the government had asked for proposals from Infrastructure Development Fund, which is owned by the Jeddah-based Islamic Development Bank (IDB), and Kuwait-based Gulf Investment Corp, whose technical partner is the US firm AES Corp.

The proposals were to cover buying and operating the plant, as well as expanding capacity, the sources said.

"It's an option the Bahraini government is looking into to see if they can provide cheaper electricity," a senior industry official said.

"The Bahraini government asked the two companies to bid for the plant more than four months ago, and then sell back the electricity to Bahrain. If it is cheaper, Bahrain will go for it," he said.

Kuwait to host oil conference in November

Kuwait will host a conference in November on the role of foreign companies in the development of its oil fields, the official Kuwaiti News Agency said.

The conference will run from November 20 to 21 and will focus on "the role of world oil companies in the development of Kuwait's oil fields, from a constitutional, legal, economic and technical point of view. "

The emirate Kuwait announced in December that foreign oil firms would be invited to invest seven billion dollars up to 2003 to develop the emirate's fields.

Kuwait wants to increase its production capacity to 2.5 million barrels per day (bpd) in 2000 and three million bpd in 2005. Its present capacity is about two million bpd.

Foreign oil firms are presently restricted to technical service agreements. The emirate controls about 94 billion barrels of oil reserves, or 10 percent of global reserves.

Saudi urged to create more private sector jobs

Saudi Arabia needs to revamp its educational system and work with the private sector to deal with the growing pressure of Saudi nationals seeking jobs, an economic consultancy firm said.

The Consulting Centre for Finance and Investment (CCFI) said in a report that Saudi nationals should face the reality that the days of well-paid public sector jobs were almost over.

"Strenuous efforts need to be undertaken on a large scale in revamping and retooling the educational system, " said the report.

The report said nearly 60 percent of the Saudi population was of working age.

Official figures in the CCFI report showed that the number of Saudis employed rose by 20 percent in the fifth development plan from 1990 to 1995 but that Saudis were only 34.7 percent of the total workforce in the kingdom.

The figures showed that the number of employed Saudis was expected to rise by 21 percent in the sixth plan 1995-2000 and Saudis would make up 41 percent of the total workforce.

Bahrain to build $5 bln Oil plant

Work is expected to begin on a planned $5 billion oil refining and petrochemical complex in Bahrain in September, industry sources said.

The official said private Saudi firm Petroma Refining & Marketing is expect to choose soon between three European firms and one US firm competing to do the land reclamation for the project.

"Practical steps are being taken to start construction work on the project next month," a senior industry official said. He gave no further details.

Jeddah-based Petroma, a sister company of the private Saudi contractor Industrial Development Establishment (IDE), has been negotiating with six US and European firms to construct and operate the complex.

A group of Saudi investors, headed by Saudi King Fahd's nephew Prince Abdel-Aziz bin Mishal bin Abdel-Aziz, are the owners of IDE and Petroma.

Iran, Saudi, UAE partner in first foreign bank

Iran has signed an agreement with Saudi Arabia and the UAE to open the first foreign bank here since the 1979 Islamic revolution, press reports said.

The new Investment and Development Bank (IDB) will be aimed at attracting Central Asian investment capital, particularly for Iran's Sarakhs free-trade zone along the Afghanistan border.

Sarakhs director Nasser Vaez-Tabassi, cited in the Tehran press, said IDB will begin operating soon with some 150 million dollars in capital and is planning branches in nine countries in the region.

He said it would be headed by a former Saudi finance minister but did not give further details on IDB's management.

He said Iran's 33.5 percent share of IDB is held by the Imam Reza Foundation, a state-owned behemoth which controls huge swathes of the Islamic republic's tourism and agriculture sectors as well as the local franchise for Coca-Cola.

Lebanon economy in deep recession

The Lebanese economy is in a recession more acute than last year with rising unemployment, lower consumption and declining capital inflows, a leading bank said.

"Indicators of aggregate economic activity reveal that recession this year is deeper than last year. Also unemployment is high, running at more than 25 percent," Fransabank said in a report analysing the economy up to the first half of 1999.

The report said aggregate demand, a measure of consumer spending, fell 13 percent in the first half and capital inflows, the bloodline of the economy, dropped 19 percent.

"Falling economic activity is captured by the relatively larger deficit in the balance of payments so far ($149 million)," Fransabank said.

In banking, private deposits grew at half last year's rate to $ 1.1 billion. Lending to agriculture, construction, industry and commerce expanded $883 million compared to $ 1.1 billion.

Texaco to explore oil, gas in Bahrain

US oil giant Texaco will begin exploration work in Bahrain within a month, both onshore and offshore, a newspaper said.

A technical team is expected to arrive "soon" and begin work within a month, to evaluate potential oil and gas sites in and around the Gulf archipelago, the Gulf Daily News reported.

Texaco and the government of Bahrain on Tuesday signed a memorandum of understanding for the US company to "carry out technical studies ... to determine the potential of drilling oil in the country."

Bahrain already has an oil exploration and production-sharing agreement with the US Chevron company, which came into force in March last year.

That accord covers exploration and production sharing in offshore areas to the west and north of Bahrain.

Jordanians claim $3.3 bln from Kuwait

Some 25,000 Jordanians expelled from Kuwait after the 1991 Gulf War are claiming 3.3 billion dollars in compensation from the emirate, the Al-Rai Al-Aam daily said.

A lawyer charged with winning this compensation, Abdel Nasser Nassar, told the newspaper the claims were for the Jordanians' shares in companies, factories, printers and stone masonaries based in Kuwait.

The paper on Saturday said Kuwait had agreed to pay compensation to Jordanians working in the emirate prior to the 1990 Iraqi invasion and who were barred from returning after the Gulf War.

The news came amid a thaw in ties between the two countries -- on Sunday, Jordan appointed its first ambassador to Kuwait since 1990.

Iraq starts pumping oil aid to Turkey

An Iraqi Red Crescent official said on Monday Baghdad had started pumping $10 million worth of oil to quake-battered Turkey.

"Iraq has began pumping oil to Turkey as from Sunday at a rate of 100,000 barrels per day for five days," Sadeq Hameed Alwash, head of the Iraqi Red Crescent Society, told a news conference.

Iraq had pledged to top any amount of aid given to Turkey by the US.

Iran to protect foreign investors

Iran must guarantee the security of investments in the Islamic republic in order to attract the foreign capital needed to help fix its economy, President Mohammad Khatami said, as reported by the Bahraini The Gulf Daily News.

"Economic security is a prerequisite for solving our economic problems," Khatami said in a meeting with the new head of Iran's judiciary, Ayatollah Mahmud Hashemi-Shahrudi, said the paper.

"The further we advance toward making investments in Iran clear and transparent, the further we move toward solving our economic problems, " he said, quoted by the official IRNA news agency, the paper added.

The paper said foreign firms have been wary of investing in Iran since the 1979 Islamic revolution, when countless companies lost millions of dollars as the new regime nationalized everything from hotels to banks to factories in major industrial sectors.

Since then Iran has had no law to guarantee the safety of investments by foreign firms, which have also shied away because of the so-called "49 Per cent Law", according to the paper.

Jordan reopened its embassy in Kuwait in March, marking a new era in relations which had been frozen for nine years after the emirate accused Amman of backing Baghdad during the 1990-1991 Gulf crisis.