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Nov 22, 1999

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

Nigeria plans higher oil budget for 2000 vs 1999

Nigeria's President Olusegun Obasanjo has proposed a budget for oil producing joint ventures in 2000 of $3.15 billion against the $2 billion they were to spend this year, a government minister said.

"Of the $3.15 billion, $0.3 billion is allocated for the shortfall in 1999," Information Minister Dapo Sarumi told reporters late on Tuesday.

The $2.85 billion proposed for spending on exploration and production next year is roughly what the companies had asked for and much more than has been approved under past military rulers.

In previous years the multinationals operating the joint ventures which can produce more than two million barrels of crude per day have complained that their allocation was not enough to maintain or expand production.

The biggest of the joint ventures is operated by Royal Dutch/Shell. Others are Mobil Corp, Chevron Corp, Agip, Elf-Aquitaine and Texaco Inc. Sarumi said the budget would be presented to the national assembly, which must approve it before it becomes law.

Bombardier sells $165 mln worth of bizjets at Dubai

Canada's Bombardier Aerospace announced the sale of 13 business jets worth around 165 million dollars at the Dubai air show on Tuesday, including five of its new Learjet 45.

A 145-million-dollar deal was signed with a Swiss-based aircraft management group, ExecuJet Aviation, for the Learjet 45s, four Continentals, two Learjet 60s, and one Special Edition aircraft.

And a private Turkish airline, Guven Air, ordered a Challenger 604 bizjet during the show in this Gulf emirate, worth some 21 million dollars.

John Lawson, Bombardier's sales president, told reporters that delivery of the planes ordered by ExecuJet would begin in 2000 and the aircraft would be operated in southern Africa and Scandinavian countries.

SABIC aims to raise production capacity 40 pc by 2000

Saudi Basic Industries Corp. (SABIC) is aiming to raise its annual production capacity by 40 percent over a two-year period that runs until the end of 2000, the petrochemical giant said Wednesday.

It said total capacity would be raised from 25 mln tons at the end of 1998 to 35 mln tons by the end of 2000.

Saudi to grant $20 million to Palestinians

The World Bank said on Wednesday that Saudi Arabia had agreed to provide a $20 million grant to fund construction of two courthouses in the West Bank and Gaza Strip.

"The courthouses will be tangible symbols of the importance of the rule of law, providing the appropriate dignity and space for the protection of rights," Joseph Saba, director of the West Bank and Gaza Country Department at the World Bank, said in a statement.

The money will also be used to train judges and court personnel to increase the efficiency and transparency of the judicial process and to develop a legal information system, the statement said.

The World Bank said Saudi Arabia would provide additional funding to rehabilitate and construct roads in the Palestinian territories.

Kuwait stocks sink to lowest level in 42 months

Kuwait's stock index fell sharply on Tuesday to its lowest level in 42 months on lack of investor confidence and growing internal feuds.

The Kuwait Stock Exchange (KSE) index fell 17.7 points, or 1.23 percent to 1418.5 points after recording record year lows in the last two sessions.

The continuing decline comes despite repeated assurances by the government of the OPEC members that the country`s economy was improving on the back of the recent improvement of world oil prices.

Central Bank Governor Shaikh Salem Al-Sabah has been facing strong criticism after warning last week against state intervention to boost the market, which has shed more than 50 percent since hitting an all-time high two years ago this month.

Public feuds among some major players who were once in close alliance on the market are also weighing heavily on settlement, triggering concerns of the true size of their holdings and the financial standing of related listed concerns.

Tuesday's sharp decline was accompanied by a small rise in daily trading to 2.07 million dinars ($6.82 million) but the value was way below last year`s daily average of 14 million dinars and 40 million dinars the previous year.

Saudi seals new foreign stock investment scheme

Saudi Arabia's central bank has formally notified the kingdom's banks that foreign investors can now buy local stocks through unit trusts, Al-Riyadh newspaper said Tuesday.

The Saudi Arabian Monetary Agency's move seals a decision first announced earlier this month by Finance Minister Ibrahim bin Abdel Aziz Al-Assaf to open up the Arab world's largest bourse to foreign investors.

Assaf on Monday hinted that direct investment might also be allowed, although he gave no date for when this would happen.

He said the Saudi stock market had a capitalisation of 190 billion riyals (50.6 billion dollars) and estimated the 12 unit trusts of the kingdom's banks were worth some 2.2 billion riyals (587 million dollars).

The kingdom's NCFEI all-share index has grown by more than 20 percent since the start of the year, boosted by recovering crude oil prices.

Gulf GIC signs $160 mln loan with Saudi banks

The Gulf Investment Corp (GIC) said on Tuesday it signed a 600 million riyal ($160 million), five-year loan with Saudi Arabian banks.

GIC, owned by Gulf Arab states, said in a statement participants in the loan signing in Riyadh welcomed efforts by the Saudi central bank to facilitate the loan.

It said the loan was needed for "cautionary" steps to guarantee GIC liquidity ahead of possible "millennium bug" computer disruptions.

GIC said the loan was arranged by Riyad Bank, Arab National Bank, Al-Bank Al-Saudi Al-Fransi and Saudi British Bank.

Qatargas to raise capacity by nearly a third

Qatar Liquefied Gas Co. (Qatargas) is aiming to raise the capacity of its plant by nearly a third to 8.4 million tons per year, the specialist Middle East Economic Survey (MEES) reported Monday.

"Qatargas has tested its facilities to produce liquefied natural gas (LNG) at a capacity of 8.4 million tons per year compared to the original nameplate capacity of 6.4 million tons per year," MEES said.

The expansion will require "minimum new investments" since the plant was designed for extra capacity and the expansion project is expected to be completed by the end of 2002, the Nicosia-based weekly said.

Emirates firm expresses interest in building tanker port

The Emirates Petroleum Group of the United Arab Emirates (UAE) has expressed interest in building an oil tanker port at Weh island off the coast of Aceh province, a report said Wednesday.

The port, to be built in the Sabang integrated economic development zone, would act as a transit point for the sale of crude oil from the Middle East to Asia, the Antara news agency quoted the director of the zone management board, Zubir Sahim, as saying.

Sahim said he would leave for the Emirates later this month to follow up the project.

He said Sabang was deemed strategically located to serve the main markets for Middle East crude in East Asia, particularly Singapore and Japan. Weh is at the entrace to the Malacca Strait.

It is part of Aceh province, where demands for a referendum of self-determination have been on the rise.

Thailand buys 2000 Oman term crude from MOG

State-owned Petroleum Authority of Thailand (PTT) has signed a new contract to buy 2000 term Oman crude from the Oman Ministry of Oil and Gas (MOG), traders said on Friday. They said the contract, at the official monthly MOG price, was for around 17,000 barrels per day (bpd) of Oman crude for lifting January to December 2000.

For 1999, PTT had purchased term Oman only from traders and had no contract directly with MOG, traders said.

They said it was uncertain if PTT would still maintain its Oman term contracts with traders for next year, after its new deal with MOG.

Iran asks for delay in delivery of Thai rice

Iran has asked for an indefinite delay in negotiating delivery under a government-to-government agreement to buy 300,000 tonnes of Thai rice, a Thai official said on Friday.

"But we have not been informed of the cause of the delay as most of the conditions, aside from price and payment terms, have already been concluded," Krirk-krai Jirapaet, head of Thailand's Foreign Trade Department, told reporters.

He did not detail the quantity of rice that would have been delivered under the deal in December.

However, M.H. Vahid, a senior official of Iran's Government Trading Corporation, told Reuters that Iran was concerned about the high export price of Thai rice.

"We think the market price could be lower after supply from the new crop enters the market in the middle of next year," Vahid said.

"Iran now has enough stocks to supply our domestic market," he said. "However, we are still committed to what we agreed under the memorandum of understanding with Thailand."

Traders said the free-on-board price of the grade B 100-percent rice was quoted on Friday at $230 to $235 per tonne, while that of five per cent rice was quoted at $225.

Libya to settle debts with Bulgaria, boost trade

Libya will repay its debts to Bulgaria and the two countries have agreed to boost economic cooperation, Bulgaria's Deputy Prime Minister Evgeni Bakardzhiev said on Friday.

He told reporters after an inter-government economic commission session that Libya's debts to Bulgaria totalled $290 million, including state debt of more than $50 million. The rest is owed to Bulgarian firms.

"We agreed that a timetable for payment will be worked out by the end of the first three months of the next year," Bakardzhiev said.

A working group would agree how to settle the debt, either with crude oil or through direct banking operations, an official from the Bulgarian Finance Ministry said.

Iran sets ceiling on foreign borrowing

Iran's parliament voted to limit foreign borrowing over the next five years, in an effort to prevent a repeat of a debt crisis in the mid-1990s.

Deputies set a ceiling of $25 billion at current value on the difference between total foreign financial obligations, including debts, and hard current reserves at the end of a five-year economic plan which begins in March 2000.

In a debate carried live on state radio, deputies said that President Mohammed Khatami's government had asked authorisation to raise the difference to about $47 billion help it revive the stagnant economy and create 750,000 jobs a year. But the request had already been vetoed by a parliamentary commission.

Iran's current total foreign financial obligations are an estimated $22 billion, including $13 billion in debts. Foreign reserves are about $5 billion.

The approved measures also set maximum yearly debt payments at 30 per cent of annual state hard currency earning, which is forecast at about $11 billion.

Some deputies tried to further restrict borrowing, saying it could trigger a repeat the debt crisis, which came after Iran went on a $10 billion shopping binge in the early 1990s to rebuild the country following the 1980-1988 war with Iraq.

"We are giving the government a blank check for $40 billion. If the government does not achieve its (income) goal — which is not unlikely — we will be on the threshold of a national catastrophy," said Ali Abbaspour, a conservative deputy.

But MP Mohammed Baqer Nobakht backed the approved debt ceiling, saying it matched that in the current economic plan.

Iran expects hard currency earnings of $105.6 billion and expenses of about $112 billion during the plan. The government has to rely on foreign loans to make up the difference, or to fund development projects not covered in the plan.