Jun 26 - Jul 02, 2000
OPEC agrees modest
output increase, prices rise
OPEC on Wednesday approved a cautious deal to raise world crude
supplies and tame runaway oil prices that have pushed up energy bills in the West.
The cartel agreed to lift output for 10 member countries by a modest
three per cent increment of 710,000 barrels daily.
US Energy Secretary Bill Richardson said: "I am pleased with this
figure and hopefully, with additional oil from non-OPEC countries that might be announced
soon, this will be good news for the American consumer." But dealers said the
increase might not prove enough to calm prices. Light crude oil futures in New York traded
up 72 cents to $31.37 a barrel well in excess of the $25 a barrel OPEC is
"We are going to have firmer prices. OPEC wants to lag, not to
lead the market," said Gary Ross of US consultants PIRA.
The pact raises production limits for 10 OPEC members, excluding
sanctions-bound Iraq, to 25.4 million bpd from 24.69 million. Leakage over quotas means
current output already is estimated at about 25.3 million.
"With extra leakage, this will probably mean only 400,000 bpd of
net new oil which means there's no soft landing for oil prices," said Leo Drollas of
London's Centre for Global Energy Studies. Outside the cartel, Mexico and Norway are
expected to announce their own additional supplies. Asked what OPEC would do if prices
stay high, OPEC Secretary General Rilwanu Lukman said:
"We will do whatever it takes to bring (prices) down to a level we
consider more reasonable." The producer group meets again on September 10 in Vienna.
OPEC's deal, effective from July 1, includes Iran. Iranian Oil Minister
Bijan Zanganeh said he would endorse the pact.
Irritated by heavy US lobbying in March, Tehran declined to sign a deal
that lifted exports by a hefty seven percent.
G15 blame West, warn of international mergers
The G15 group of developing nations complained Tuesday that mergers
involving multinational corporations were making life even harder for smaller businesses,
Egyptian President Hosni Mubarak said.
The group's leaders warned of "the repercussions of mergers
between large companies on small and medium-size firms' ability to compete," Mubarak
told reporters at the close of the G15's annual summit.
The growth of mega-companies through such mergers is having a negative
effect on the labour situation within the kind of businesses that poorer countries need to
provide employment, he said.
The G15, founded in 1989 to counter the power of the wealthy
industrialized nations, will group 19 nations after the admission of new members Iran and
Leaders of developing nations on Monday had blasted the West for
shackling them with unjust trade terms and crushing debts, with Jamaica's prime minister
accusing the rich of consigning them to the "graveyard of penury".
The G-15 group of African, Asian and Latin American countries wants to
raise its voice ahead of next month's meeting of G8 industrialised nations.
After a formal opening at President Hosni Mubarak's palace, the leaders
held two sessions of talks at a resort on the outskirts of Cairo before adjourning the
summit to Tuesday.
Jamaican Prime Minister J.P Patterson said in a speech that
globalisation had favoured a few and marginalised the weakest. He said the industrialised
north must not use globalisation to shirk its part in the war on poverty while developing
nations "buckle under the burden of external debt, perpetuated by those whose past
transgressions, current intransigence and myopic vision will condemn us to the graveyard
Nigerian President Olusegun Obasanjo also bemoaned the debt burden
faced by the African continent.
Kuwait delays key economic reforms
Kuwait's government submitted a plan of action for economic reforms to
a parliamentary committee on Wednesday, but major economic legislation has been put on
hold until October, the finance minister announced.
"We presented a programme with definite dates for implementation.
The programme has been accepted by the committee," Sheikh Ahmad Abdullah Al-Sabah
told reporters after a meeting with parliament's economic panel.
But he said that approval of major legislation like privatisation,
foreign investments and income tax would be delayed because of parliament's long summer
recess expected to start in July.
Committee chairman MP Abdelwahab al-Haroun said the government's plan
focuses on five main economic planks: financial reforms, privatisation, organisation of
the labour market, administrative development and the Kuwait Stock Exchange
But the minister reiterated last week that he would press ahead with
reforms despite the surplus and that unpopular decisions were inevitable.
Tunisia strongest in Africa on economic growth prospects
Tunisia has the soundest economic growth prospects of African countries
surveyed by the World Economic Forum (WEF), while Zimbabwe and Kenya are the 'losers', a
WEF report released on Wednesday said.
The Africa Competitiveness Report on the economic health of 24 African
countries was released ahead of the three-day WEF southern Africa economic meeting, due to
start later on Wednesday.
The report, last issued in 1998, said that Tunisia was followed by
Mauritius, Botswana, Namibia,
At the other end of the spectrum was Nigeria in 20th position
with analysts remarking that newfound democracy was offset by ethnic tension, poverty and
debt followed by Burkina Faso and Kenya.
Iran, Oman to finalise joint offshore gas field soon
The governments of Oman and Iran are soon expected to conclude final
negotiations on developing their joint Bukha-Henjam offshore gas condensate field, a
Ministry of Oil and Gas official said on Tuesday.
Hussein al-Lawati, the ministry's director-general of oil and gas
exploration, told Reuters the two Gulf neighbours were concluding talks to review
"The talks are in final stages to review a few market options that
we have already identified," he said.
He added that the cost of the project and production would depend on
terms to be negotiated with the potential buyers the ministry was negotiating with, but
gave no further details.
The Bukha-Henjam field, which holds 1,800 billion cubic feet of gas and
400 million barrels of condensate, is located 12 km (7 miles) off the coast of northern
Oman in the Straits of Hormuz, a strategic expanse of water shared by the two countries.
Ministry officials said Oman would own a 20 per cent stake in the
project and the rest would go to the Iranian government.
France will swap 400 mln francs of Algerian debt
France will convert 400 million francs (61 million euros, 58.4 million
dollars) of Algeria's debt into investment, once an agreement has been reached with the
Paris Club of sovereign creditors, a source close to the French finance ministry said on
The ministry believes an agreement with the Paris Club, which is needed
for France to go ahead with the debt conversion, could come by the end of the month. There
was little doubt such an agreement would reached.
If the Paris Club gives the go-ahead, Algeria's foreign debt will be
reduced by 400 million francs, the source said. Agreements on debt swaps or debt
reductions are agreed by creditor countries together, rather than on a bilateral basis.
Algeria's foreign debt totals some 28.3 billion dollars, and owes some
3.5 billion euros (3.36 billion dollars) in French debt, making France the country's
biggest single creditor, the source said.
$7.5 mln credit for Palestinian
The World Bank said Wednesday it had approved a 7.5 million dollar
credit for the Palestinian Authority to improve roads, water distribution and sewage
services in the West Bank and Gaza Strip.
The effort also aims to strengthen municipal and central government
administration in the territories.
"About 400,000 persons in 35 communities in West Bank and Gaza are
expected to benefit directly from the project," the World Bank said in a statement.
The funds support the Palestinian Authority's Second Municipal
Infrastructure Development Project, which builds on an earlier initiative in the same
The overall project cost is 26 million dollars. Also contributing are
the Palestinian Authority itself, 4.4 million dollars, and the Saudi Fund, five million.
Jordan to boost foreign investment
Jordan, hoping to attact foreign investors, has launched an advertising
campaign at home and abroad that bills the kingdom as "a small country with big
ideas." Giant billboards have been erected around Amman in hopes of "increasing
Jordanians' pride and their confidence in themselves," said an official at the royal
palace, which is directing the campaign.
One sign includes a picture of a young Jordanian man and the words
"With effort..." the first part of a quotation from Al-Mutanabbi, an Arab poet
from the Middle Ages, that ends with the words "desires become fact." On the
back of the billboard is a smiling young woman with the caption "Think Big."
"The goal is to try to improve the mood of Jordanians mood, because a good mood is
the best way to involve them in the process of change to the era of modern
technology," the royal official said.
Presidents make first contact since 1980
Iranian President Mohammad Khatami and Egyptian President Hosni Mubarak
spoke by telephone Wednesday in the first direct contact between leaders of the two
countries since they broke off relations in 1980, state television said.
"In addition to bilateral ties, the two presidents talked about
Iran joining the G15" group of developing nations, the television said. Mubarak
"greeted his counterpart, expressed his pleasure at Iran's membership in the G15 and
said he hoped that the two countries' relations will develop further," the television
added. Iran joined the G15 during its 10th meeting Monday and Tuesday in Cairo.
Gas for huge industrialisation
Oman's government has set aside five trillion cubic feet (143 billion
cubic metres) of gas for a major industrialisation drive in the Indian Ocean port city of
Sohar, an oil and gas ministry official said Wednesday.
"The ministry of oil and gas has set aside five trillion cubic
feet of gas for industries in Sohar" in the latest development plan, Khalifa bin
Mubarak al-Hinai, the ministry's adviser for technical affairs, told Oman Observer.
"It will meet the feedstock and energy needs of the planned
projects over their 25-year operational life," he said.
Peugeot to build in Iran
French carmaker Peugeot announced Saturday that it will begin
production of its new 206 model in Iran in early 2001, the official agency IRNA reported.
"Following a test production of the Peugeot 206, 15 thousand units
will be produced next year, and 120 thousand units will be produced in Iran by the end of
1383 (2003)," according to Hossien Amiri an official of the Iran Peugeot project,
Hossien Amiri, IRNA said. The announcement came on the first day of a meeting in Tehran of
French spare parts makers linked to the Peugeot plan, he added.
Link Egypt, one of the fastest growing Internet Solutions Providers
(ISP) in the Middle East and a leading regional turnkey Internet solutions company,
announced it is to merge with major Egyptian ISP, InTouch, forming
$66 mln refinery upgrade project
Bahrain's Prime Minister Sheikh Khalifa bin Sulman al-Khalifa
inaugurated on Monday a $66 million in-line blending project at Bahrain's only oil
refinery, a Bahrain Petroleum Company (BAPCO) statement said.
BAPCO, which runs the 250,000-barrels-per-day (bpd) plant, awarded
Japan Gasoline Corp (JGC) a contract to carry out the work in 1998.
The project is part of a programme to upgrade the ageing refinery which
was built in 1936.
Bahrain last year awarded International Bechtel Company Ltd a contract
to conduct a study of engineering work that would reduce the amount of sulphur in its
diesel oil to 0.05 per cent from the current level of about 0.5 per cent.
Saddam calls World Bank a 'cancer'
Iraqi President Saddam Hussein said Thursday the World Bank is a
"cancer" gnawing at the Third World, the official INA news agency reported.
"Economists contract loans with the World Bank or other financial
institutions which were created to be a cancer in Third World countries," he was
quoted as telling Yemeni Transport Minister Abdel Malek al-Sayyani.
INA said Sayyani had brought Saddam a message from Yemeni President Ali
Abdullah Saleh on the economic situation in his country, one of the world's poorest.
FIB changes name
Bahrain-based Faysal Islamic Bank (FIB) announced on Wednesday it has
changed its official name to Shamil Bank of Bahrain.
"Shamil Bank of Bahrain, an Islamic bank, announces that after
approval of the Commerce Ministry and the Bahrain Monetary Agency its name has changed
from Faysal Islamic Bank of Bahrain to Shamil Bank of Bahrain," a bank statement
OPEC will defend $25 oil price: Naimi
Saudi Arabian Oil Minister Ali Al-Naimi said on Thursday OPEC would
defend a $25 a barrel target price for its basket of crudes.
"We have a $25 target price, we will try to keep it there, we will
do whatever needs to be done, we will watch it like a hawk," Naimi told reporters.
OPEC on Wednesday agreed to raise output by 708,000 barrels per day in
a further move to pull runaway oil prices down to a level acceptable to consumers and to
producers concerned over stunting demand. OPEC also raised output at its March meeting.