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Oct 25, 1999

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

Dubai to get Adnoc and Dolphin gas

Obeid bin Saif Al Nasiri, UAE Minister of Petroleum and Mineral Resources, confirmed that both the Abu Dhabi National Oil Co (Adnoc) and the proposed Dolphin project of the UAE Offsets Group (UOG) will supply natural gas to Dubai over the long-term to meet the emirate's burgeoning demand.

The demand for natural gas in Dubai is proiected to increase from 800 million cubic feet per day (cfpd) in 1996 to 1,500 million cfpd by 2001.

"We hope both will come through. These types of projects are long-lead and their nature is such they take time to be completed. Studies are on for the projects and work is ongoing," said Nasiri.

He made these comments after inaugurating the 9th Arab Oil and Gas show, which will run till October 19.

In February last year, Adnoc and the Dubai Supply Authority (DSA) signed a gas cooperation agreement to supply 500 cfpd commencing late 2000 and increasing to 800 million cfpd over the next two years.

The gas will be sourced from onshore fields in Abu Dhabi.

DSA signed an MoU in June 1999 with the UOG (Dolphin initiative) to buy between 200 and 700 million cfpd of natural gas to be piped from Qatar's North Field.

"The Dubai Government and UOG agree to cooperate in identifying and maximising opportunities for investment arising out of gas provisions. The MoU provides for the signing of a detailed gas sales agreement by the end of the year," a UOG statement has said.

It has not been made clear whether the Dolphin project will have to do anything with Adnoc on proposed gas supplies to Dubai.

Ipic acquires 50pc stake in Hyundai Oil

The Abu Dhabi government-owned International Petroleum Investment Co (Ipic) announced it has reached an agreement to acquire a 50 per cent shareholding and controlling interest in the Hyundai Oil Refining Co (HDO), crude refining and marketing arm of the South Korean business group Hyundai, through the purchase of new shares.

The deal worth Dhl.87 billion ($510 million), will ensure an increase in HDO's offtake of crude from the Abu Dhabi National Oil Co (Adnoc), on standard Adnoc terms and conditions.

To maintain a 50 per cent shareholding, Hyundal shareholders will invest a further Dh279 million into the company.

UAE Central Bank plans to raise capital

The UAE Central Bank is planning to raise its capital substantially while the minimum capital of commercial banks in the UAE will also be raised once the new banking law comes into force.

Presently, the authorised, issued and paid-up capital of the Central Bank is Dh300 million while the minimum paid-up capital of commercial banks is Dh40 million.

As per the UAE's new banking law, the authorized capital of the Central Bank will be raised to Dh2 billion while the minimum capital for commercial banks will be raised to Dh100 million, Sultan bin Nasser Al Suwaidi, the UAE Central Bank governor, told.

The new banking law is in the hands of the higher committee and once it is approved, the Central Bank and commercial banks will raise their capital. "Once it is decided, the capital will be raised," Al Suwaidi said without specifying how the capital will be raised.

$1b offered for U.S.-UAE projects

William Daley, U.S. Secretary of Commerce, said the Export/ Import Bank (Exim bank) has proposals for U.S.-UAE projects worth $1 billion.

Daley gave a speech at an Emirates International Forum-Dubai Chamber of Commerce and Industry joint event.

He said UAE and Gulf views on patents and property rights will be taken to the USTR representative and claimed limited efforts was made on patents although concerned ministries, as earlier announced, are working on patent amendments prior to possible implementation in 2000.

A GCC committee was also formed for a similar purpose.

Daley's speech caused a stir among attendees and Juma Al Majid, a prominent UAE businessman, asked him about the U.S. insistence on imposing quotas on UAE textiles although the country opens its doors for various products.

"The textile quota system is related to a specific schedule and we are the most global open markets. Our textile industry looses millions of jobs because of exports" said Daley.

When asked why the U.S. obstructs UAE traders' deals under the UN food-for-oil agreement, Daley claimed the entire issue is within the UN job tasks.

Morocco economy

Morocco's economy is expected to shrug off this year's stagnation in 2000 and leap by 8.4 per cent as measured by the Gross Domestic Product (GDP), the country's leading independent research centre said.

"Most of the indicators are satisfactory. Therefore Morocco's economy is expected to return to an upward trend and grow by an average 8.4 per cent in GDP next year, from zero growth in 1999," Ahmed Laboudi, head of the Centre Marocain de Conjoncture (CMC) saidl.

Saudi Prince weighs Ghana gold venture

Saudi Prince Alwaleed bin Talal mentioned Tuesday he was considering investing in Ghana's Ashanti Goldfields Co Ltd, which is battling for survival in the face of huge losses on gold derivatives.

Ghana's acting Mines and Energy minister, Ekwow Spio-Garbrah, said Alwaleed had written formally offering help.

People in London familiar with the situation said a lifeline of $400 million was being talked about.

Saudi to encourage foreign investment

Saudi Crown Prince Abdallah bin Abdel Aziz has announced a package of legal reforms to encourage foreign investment and said privatisation was now a "strategic option" for the oil-rich kingdom.

The reforms will allow foreign investors to own property and amend the system of local sponsorship for foreigners doing business in the Gulf state, he said in a speech late Tuesday in Medina, western Saudi Arabia.

Iran optimistic on oil cut compliance

OPEC power Iran said on Tuesday that compliance with global production cuts, a key element behind the cartel's success in driving up oil prices, was satisfactory.

Iran's OPEC Governor, Hussein Kazempour Ardebili, told Reuters in a telephone interview that producers were committed to maintaining strict adherence to a supply restraint pact that rescued the market from last year's crisis levels.

Some independent surveys which showed OPEC production discipline had slipped in September drove down prices by $3.50 during the first week of October. They have since rebounded.

Egypt stocks overshadowing bond market

A boom in the Egyptian stock market over the last two weeks has captured investor interest and overshadowed trade in the bonds market, bankers and bond traders said on Monday.

Dalia Sultan, fixed income trader at EFG-Hermes Brokerage, said there was some foreign interest in the bonds market but most investors had switched to the highly active stock market instead.

"There is nothing new in the bonds market," said one trader. "All the attention has been drawn to the stock market."

Foreign investors have regained confidence in the local equity market after the appointment of a new government headed by former privatization chief Prime Minister Atef Obeid.

Any activity in the bond market is centered on government bonds with shorter maturities, such as the May 2000 and October 2003 contracts, traders said.

They said bonds dated 2000 were at a yield of 9.8 percent, while 2003 were at a yield between 10.2 and 10.3 percent.

Qatar central bank to free IR on riyal

Qatar Central Bank (QCB) governor Abdallah bin Khalid Al-Attiyah said that the Central Bank will soon "free interest rates on the riyal in a comprehensive manner, " the Qatar Gulf Times daily reported Sunday.

"QCB has applied the policy of freeing interest rates on a gradual basis and in the near future there will be a comprehensive freeing of the interest rate," the Central Bank governor told reporters shortly after opening the Q-Money '99 exhibition at the Qatar International Exhibition Centre, the paper said.

Iraq-Indonesia to strengthen ties

Iraq and Indonesia signed an agreement overnight to expand their economic cooperation, particularly in oil exploration, the official Iraqi news agency INA reported Friday.

The accord was signed by the two countries' respective trade ministers, Mahamed Mahdi Saleh and Rahardi Ramelan, at the end of the fifth round of meetings of their joint economic commission.

INA said the agreement pledged increased efforts to widen cooperation in petroleum, industrial, agricultural, health.

Japan offers new deal on Saudi oil concessions

Saudi Arabia and Japan have been haggling for some time over renewed Japanese oil concessions in the Kingdom.

Japan's latest bid at breaking the dead-lock over the issue came in the form of a new proposal through joint production with Saudi and Kuwait of a new type of fuel from natural gas.

The deal would be in return for extending a Japanese oil developer's concession there, a report said Thursday.

The Japanese proposal, is estimated to cost more than 100 billion yen (940 million dollars), aimed at breaking a stalemate in talks on a concession owned by Tokyo's Arabian Oil Co. Ltd., the Nihon Keizai Shimbun said.

The company however stopped short of confirming it was in talks on the joint fuel production.

"In fact, our company has been considering an effective use of natural gas in the concession. But we have not reached a stage where we can announce the contents of such an idea," a spokesman for Arabian Oil said.

"We cannot say anything at this stage as there are various people and partners concerned," he said when asked if the reported joint project was an option for the company.

Arabian Oil is Japan`s biggest oil producer with the Saudi government and Kuwait Petroleum Corp. the two largest shareholders each with a 10.9 percent stake.


The 40-year concession in oil fields in the Saudi-Kuwait border area is due to expire next February.

Saudi Arabia is seeking large scale Japanese investment, particularly in construction of railway links to mining regions, in return for the extended concession, the leading economic daily said.

Meanwhile Japan, which depends on the Middle East for more than 80 percent of its crude oil imports, had been reluctant about involvement in the railway plan which was seen as unlikely to be profitable, the report said.

Opec chief: oil curb revision too early Opec's president said on Wednesday that it was too early for the oil producers' group to explore the possibility of extending a global supply curb pact beyond March, the Oman Daily Observer reported Thursday. "It would be premature to speculate whether a decision will be a rollover or otherwise," Abdallah al Attiyah, also Qatar's oil minister, said in an interview, according to the paper.

The cartel, which is enjoying renewed clout in sensitive world oil

markets since it cut a supply restraint deal with non-Opec producers in March, is trying to build on the success of the agreement, the paper said.

Opec kingpin Saudi Arabia and Iran have suggested that the cuts could be extended beyond their expiry in March if market conditions warrant, the paper added.