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GULF

Sep 20, 1999

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

Iran unveils $112b plan to spur growth

Iranian President Mohammad Khatami unveiled a $112 billion five-year economic plan which aims to boost annual growth to six per cent and reduce the size of the dominating state sector.

Khatami, presenting the draft plan to parliament, proposed ending state monopolies on telecommunications, railways, sugar, tobacco and tea and pledged to encourage private investment.

Khatami said the plan, due to begin on March 20, 2000, forecast the creation of up to 765,000 jobs a year to fight high unemployment and meet the needs of Iran's huge youth population.

The plan is based on forecast total hard currency revenues of $112.4 billion, with $64.1 billion coming from exports of oil and petroleum products, $34.8 billion from non-oil exports, $6.7 billion from exports of services and $6.8 billion from foreign credits and investment.

Khatami did not say what average crude oil price the forecast oil income was based on. Last month, he said the plan predicted crude oil exports of $50 billion at $12.50 per barrel and petroleum product exports of $8 billion.

The plan aims to cut average annual inflation to 15.9 per cent from a current 21.9 per cent and boost growth to six per cent, up from an average 3.2 per cent a year during the previous plan.

The head of Iran's central bank said earlier this week growth had slowed to 1.6 per cent in the year to March 1999 as stagnation set in after a slump in world oil prices. But crude prices have rallied in recent weeks to 32-month highs which should go some way to help Iran meet its growth target.

Khatami said the new programme sought a balance between the purely economic demands of the country and the spiritual and political requirements of the people.

IDB fund may mop up $l.5b

Bahrain expects to raise $1.5 billion from an infrastructure fund to be issued by the Islamic Development Bank (IDB), which will provide direct investment through private equity and complementary Islamic financing.

The funds are to be utilised for projects in power, telecommunications, transportation, and natural resource industries in IDB member countries.

"The target fund size is in line with similar infrastructure funds raised for other emerging markets," said Abdulla Saif, Bahraini Finance and National Economy Minister.

The fund's principal adviser would be Washington-based Emerging Markets Partner ship, which manages the world's largest pool of funds dedicated to investment in infrastructure.

Oman sees drop in oil refinery output

Oman saw an overall drop of eight percent in oil refinery output in the first six months of the year compared to last year, although jet fuel output increased, newspapers said Saturday.

Total refined outputs fell from 14.87 mln barrels in the first half of 1998 to 13.65 mln barrels in the first half of this year, the Oman Times said, quoting statistics from the ministry of national economy.

Petrol output fell 12.7 percent for regular fuel and 17.7 percent for higher grade fuel, while gas oil output dropped 4.9 percent and butane output decreased by 10.7 percent. Jet fuel output increased by 10.2 percent.

The Organisation of Petroleum Exporting Countries (OPEC) in March decided to cut their total output by 1.7 mln barrels per day (bpd) in a bid to boost flagging oil prices.

Yemen launches Aden container terminal

Yemen on Saturday launched the first phase of the Aden Container Terminal (ACT), part of a planned free trade zone at its southern port of Aden.

"The opening today means that we are one step closer to our goal of transforming Aden into the premier regional service and distribution center," Yemen's Transport Minister Abdul-Malek Al-Sayani said in a statement.

ACT, which started operations in March, is being developed by Yemen Investment & Development International Ltd (Yeminvest), a joint venture between Singapore port operator PSA Corp Ltd and Yemen Holdings Ltd.

Under a Terminal Management Contract signed in October 1997, PSA would manage and operate the terminal for a period of 20 years as well as perform the marketing and staff recruitment fmctions.

In the first phase, costing $188 million, the port will have a capacity to handle 500,000 twenty-foot equivalent units (TEUs).

OPEC president to visit Emirates

OPEC President Yousef Yousfi is due to arrive in Abu Dhabi on Saturday as part of a Gulf-wide tour ahead of the cartel's meeting in Vienna later this month, an official spokesman said.

The purpose of Yousfi's visit or whether his meetings will include the Emirate's Oil Minister Obaid bin Said Al-Nasseri remained unclear.

Jordanian industrial delegation in Baghdad

A Jordanian industrial delegation began a visit to Iraq on Saturday which included talks with Commerce Minister Mahammad Mahdi Saleh, the official INA news agency said.

Saleh said his country was "satisfied with the level of trade ties between the two countries and wants to expand the areas of cooperation with Jordan in the future. "

The delegation, led by the president of Jordan's Chamber of Industry, Khaldun Abu Hassan, includes representatives of the food, pharmaceutical, plastics and metals sectors.

OPEC Head: Oil cuts to remain in force

Production cuts agreed last March by members of the Organisation of Petroleum Exporting Countries (OPEC) will remain in force, the body's president said here Saturday.

"The agreement of March 1999 to cut oil output will be maintained until March 2000," said Yousef Yousfi, quoted by the official WAM news agency.

"There has been a great improvement in the price of oil, as a result of (members') respect for the agreement," he added, but warned that "world stocks remain high."

Oil-producing countries decided in March to reduce world crude oil production in a bid to boost flagging prices.

Gulf Arabs offer Turkey $400 mln in aid

Gulf Arab states agreed on Saturday to contribute around $400 million to help Turkey recover from last month's devastating earthquake.

"The (Gulf Cooperation Council) decided to participate in implementing a finance programme of around $400 mln to finance reconstruction and development schemes in the areas affected by the earthquake," the GCC ministerial council said in its final statement.

The council, which concluded a two-day meeting in Saudi Arabia's Red Sea city of Jeddah, said a technical team from the six-member alliance would go to Turkey to select projects to be financed.

Highlighting historic and Islamic ties between the oil-rich Gulf Arab states and Turkey, the GCC foreign minister expressed sympathy with the victims of the August 17 earthquake, which killed more than 15,400 people and devastated housing throughout the populous northwest of the country.

Saddam says economic prosperity a priority

President Saddam Hussein on Saturday reviewed plans to balance Iraq's budget and told his government that achieving economic prosperity was a top priority for a country still under crippling United Nations sanctions.

The official Iraqi News Agency (INA) said Saddam chaired a cabinet meeting to study a plan drawn up by a ministerial economic committee headed by Finance Minister Hikmat Mezban Ibrahim.

"One of the most important goals is to reactivate the Iraqi economy not to only achieve prosperity, which is a legitimate right, but to allow before prosperity the strong people to cross with less wounds to the other shore where development starts," Saddam told his ministers, according to INA.

He urged the cabinet to approve a budget that forges a balance between increasing state revenue, cutting spending, activating production and pushing up the gross national product.

Coke-Pepsi battle

The rivalry between Pepsi Co. and Coca-Cola may very well be rendered as one of the fiercest in business history.

The globe as their battle field, the Middle East and more specifically the Arab gulf region has for long provided a hot spot arena for the soft drink mega giants to battle it out.

Saudi crude exports to west face more cuts

Saudi crude buyers in Europe and the US may face further supply cuts as the kingdom cranks up domestic refinery production and also begins to supply a new crude customer in India, the Middle East Economic Survey (MEES) said.

In its latest edition published on Monday, the weekly newsletter said crude runs in Saudi Arabia have jumped by as much as 200,000 barrels a day (bpd) from July.

Most of the major refineries had been operating at close to full capacity to take advantage of favourable margins in Asia.

Saudi Arabia has a domestic refining capacity of 1.7 mln bpd but is also involved in a number of overseas joint venture refining projects to which it supplies crude oil.

The start-up in October of a 120,000-bpd crude contract with India's Reliance will also take over some the supply normally earmarked for Western markets, MEES said.

MEES said maintenance next month at the Sasref refinery in Jubail, which has a capacity of 310,000 bpd, should help offset the higher crude runs elsewhere. In recent weeks, Sasref had increased its runs from 290,000 bpd from 240,000 bpd in early August.

Saudi banks adopt technology infrastructure

Banks and financial institutions in Saudi Arabia call for a stronger focus on information technology (IT) implementation to build services, reduce costs and improve efficiency and customer satisfaction.

Microsoft Saudi Arabia has answered their call by announcing its biggest banking and financial seminar to be held in Riyadh on 18th May 1999, 'Windows in Finance'.

"Windows in Finance' seminar will provide the Kingdom's banks and financial institutions with key insight into the latest technologies that are being adopted by the world's leading global banks," said Kunter Kutluay, business development manager for Microsoft Saudi Arabia's Enterprise Customer Unit (ECU).

Algeria, Iran, Saudi pleased with oil prices

Ministers from OPEC nations Algeria, Iran and Saudi Arabia said after a three-way meeting here Monday that they were pleased with the rebound in crude prices on the world market.

"We have examined the situation of the oil market and agreed we are satisfied with the increase in crude prices in the past few months, a rise that we must maintain," Saudi Oil Minister Ali Al-Nuaimi said, quoted by the official SPA news agency.

Following talks with acting OPEC president and Algerian Energy Minister Yousef Yousfi, and Iranian Oil Minister Bijan Namdar-Zangheneh, Nuaimi said the rebound was "the result of a total respect by both OPEC and non-OPEC nations" for production cutbacks.

Yemen main oil pipeline repaired

Yemen's main crude oil pipeline has been repaired after it was hit by an explosion carried out by tribesmen, an official said on Tuesday.

An oil ministry official told Reuters that repair of the Marib pipeline was completed on Monday after the blast one day earlier which leaked 50,000 barrels of oil.

Kuwait to call proposals from oil majors

Kuwait will begin sending out calls for foreign oil firms in November to join a seven billion dollar project to develop northern oil fields, the emirate's oil minister said in newspapers on Tuesday.

Shaikh Saud Nasser Al-Sabah also said the state-owned Kuwait Petroleum Corp. (KPC) was still collecting data on the oil majors.

The requests for proposals from the majors will go out after a November 20-21 conference which the KPC is to host on the role of foreign companies in the development of its fields, he told reporters.

Egypt to privatize 94 cos

Public Enterprise Minister Atef Obeid said on Tuesday Egypt was preparing to sell 94 state firms next year and 44 in 2001 to complete a privatization programme that has already raised 11.8 billion pounds ($3.43 billion).

Oil prices buoyant near 32-month highs

Oil prices bobbed higher on Tuesday drifting towards the 24-dollars-a-barrel level amid market confidence that producers would not relax a remarkably successful output squeeze.

The North Sea Brent reference crude was fetching 23.65 dollars a barrel, after opening at 23.41 dollars. Late on Monday the price touched a new 32-month high at 23.72 dollars a barrel.

Kuwait foreign investment body revives

Kuwait's main foreign investment arm will benefit from a current rise in world oil prices with additional cash injections by the state which has withdrawn some $80 billion from it this decade.

Finance Minister Shaikh Ahmad Al-Abdallah Al-Sabah said in Wednesday's Al-Watan daily: "There is a strategic plan to build (foreign investments) by depositing the revenue from higher oil prices and work towards raising the size of income from our foreign investments."

Kuwait's foreign holdings are a state secret but they are valued by experts at around $70 billion, with the Kuwait Investment Authority (KIA) managing a fund worth some $50 billion.

Returns in 1998 by state investment bodies, led by KIA, were around $4 billion. KIA revenues are not included in the state budget.

Saudi stiff on Japanese oil concession talks

Saudi Arabia still insists that Japan invest more than $1 billion in a mining railroad before it considers renewing a lucrative oil concession in the kingdom, a Saudi oil source said on Wednesday.

The source told Reuters the kingdom welcomed Japanese pledges to step up negotiations on the oil concession in the Saudi portion of the Neutral Zone, which expires in February.

Saudi is discussing sale of planes to US firms

Saudi Arabian Airlines is negotiating the sale of 34 of its old aircraft to US firms after renewing its fleet, a company official said on Monday.

The official, who declined to be identified, said the talks involve 16 Tristar aircraft, including some which have been in service for more than 20 years, and 18 Boeing 737 planes.

He said the talks were in the final stages and could be concluded within two weeks. He declined to name the US firms involved or to give an estimate of the value of the deal.