Jul 10 - 16, 2000
Saudi oil hike still
OPEC heavyweight Saudi Arabia and a few other oil producers remain on
course to increase production by 500,000 barrels a day in the "next few days," a
Gulf source said Thursday.
The source said the producers were intent on lowering crude prices and
if other countries in OPEC were unable to increase output or unwilling to do so, it was
"up to them."
"Saudi Arabia and other oil producers still plan in the next few
days to increase production by a reasonable amount which is 500,000 barrels per day,"
the source said.
"Those who are going to join are definitely going to do it. Those
who are not either because they do not have the spare capacity or they do not want
to then that's OK too," he said.
Saudi Arabia, the world's largest exporter, was consulting with other
producers and would continue to discuss the exact timing and method of the increase, he
An OPEC source has said that the United Arab Emirates, Algeria and
Kuwait were likely to provide some of the extra oil, with Saudi Arabia pumping the lion's
Others within the Organization of Petroleum Exporting Countries are
already producing at full capacity.
The news pressured oil prices for a third straight day though they
remain well above OPEC's target of $25 a barrel. On Thursday, U.S. benchmark light crude
for August delivery settled at $29.99 a barrel, down 68 cents. London Brent crude oil
futures settled at $29.67, up 29 cents.
Oil prices fell sharply earlier this week after a Saudi announcement
Monday that it was planning to raise output by 500,000 barrels per day (bpd) after two
OPEC production increases this year failed to bring oil down from $30 a barrel.
High level Kuwait-Iran visits to divide offshore Gulf oil
Kuwait plans to send its foreign and oil ministers to non-Arab Iran in
an attempt to reach a final maritime border deal to divide oil and gas reserves in the
Oil Minister Sheikh Saud Nasser Al-Sabah told Reuters on Wednesday he
plans to visit Iran soon to discuss the issue after an agreement came closer on Sunday
when Kuwait and Saudi Arabia signed a maritime border deal.
He did not say when the visit would take place to discuss a row which
resurfaced in recent months when Iran started drilling in Al-Dorra offshore gas field, an
area in the northern Gulf claimed by Tehran, Riyadh and Kuwait.
Influential Foreign Minister Sheikh Sabah Al-Ahmad Al-Sabah, Sheikh
Saud and other officials on Tuesday held an extraordinary meeting with parliament's
foreign relations committee to discuss the Saudi-Kuwaiti final border deal and plans to
resolve the long-standing issue with Iran across the Gulf.
On Wednesday, committee head Mohammad Al-Saqr told reporters that the
Kuwaiti cabinet was expected to approve the deal at its weekly meeting on Sunday.
He said his committee hopes to approve the deal early next week and
send it to the elected parliament for approval before the start of a long summer recess
later in July, opening the door for the government to go ahead with talks with Iran.
In 1997, Iran and Kuwait decided to postpone their continental shelf
talks until Kuwait reached a deal with its close ally Saudi Arabia, the region's main Arab
Following Tuesday's meeting in parliament, MP Abdel-Mohsen Jamal said
that for the Iranian portion of the deal, Kuwait plans to accept with an Iranian
invitation extended to Sheikh Sabah who signed the deal with Saudi for the Kuwaiti side.
Bashar's economic reforms
A decision by Syria to consider allowing foreign banks into the
country, if only in free-trade zones to begin with has been hailed as "a great step
forward in the attraction of capital" by the Syrian media.
The swift rise of Bashar to the helm of the Syrian government in
succession to his father has raised hopes among businessmen that chronic mismanagement and
state interference in the economy will come to an end.
Yet, according to a Stratfore intelligence report, the latest decisions
with respect to the banking sector seem to suggest that Bashar appears intent on creating
a parallel banking system. A path that will circumvent Syria's current banking system
controlled by his father's Baath party loyalists without directly
challenging their entrenched interests.
The report however predicts that the young Assad's plans may ultimately
result in his loss of the critical loyalty of his father's old allies.
Egypt gets wake-up call on economic reform
Reform or risk losing the confidence of foreign investors and
That was the ultimatum given by ratings agency Standard and Poor's
(S&P) in a report this week that cut its outlook on Egypt to negative from stable and
warned of a possible downgrade in credit ratings if no corrective action was taken.
"A downgrade of the ratings could occur over the next one to three
years unless budgetary discipline is strengthened, privatisation is accelerated, and the
conduct of monetary policy is made more transparent and flexible," S&P said.
"The pace of structural reform, which is central to the
government's plans for more rapid growth in exports and real GDP, has faltered over the
past two years," it added.
S&P's remarks echoed increasingly urgent calls by investors and
analysts over recent months for speedy reforms in key areas such as foreign exchange
policy and privatisation.
Challenge Fund setting up $100 mln fund with Jordan
The Challenge Fund LP is setting up a fund of up to $100 million with
Jordan to invest in Jordanian and joint Israeli-Jordanian projects, the fund's president
said on Wednesday.
"The fund was the initiative of (regional cooperation minister)
Shimon Peres," Challenge Fund president Joseph Ciechanover told Reuters. "It
will be a diversified investment fund and will be managed by us and someone in
Jordan." The Jordanian investors in the fund have not been finalised but Ciechanover
said Challenge was in advanced negotiations with certain Jordanian parties.
The World Bank has announced it wants to be a partner in the fund and
several large foreign companies are interested in investing, he added.
Kuwait to raise capacity
Kuwait's oil production capacity could rise by another 410,000 barrels
per day to around three million bpd next year after a Chinese firm hands over a troubled
and much-delayed project to build two new gathering centres.
Oil Minister Sheikh Saud Nasser Al-Sabah came under attack in
parliament on Wednesday during an oil sector debate which included strong criticism of the
project by China National Petroleum Engineering Construction Corporation.
He told MPs "Yes, there is delay in construction and yes, there is
an existing problem" with the $391.5 million project which was awarded in December
1995 to build gathering centres (GC) 27 and 28 with a total production capacity of 410,000
Egypt approves partnership deal with Europe
Egyptian President Hosny Mubarak approved on Thursday the signing of a
trade partnership agreement with Europe, saying it was necessary to modernize the local
economy and boost exports.
Mubarak's decision came following extensive debates on the possible
negative effects of the Egyptian-European Partnership Agreement, which will gradually
reduce customs in trade deals between the two sides.
Several Egyptian business federations had expressed reservations about
the agreement and its effect on local industry and the agricultural sector.
Cairo tried to calm their fears by saying that it would also reduce
high customs and tariffs on imported goods necessary for the industry, allowing local
products to stand up to European competition.
The kingdom's third privately-owned petrochemical company, Saudi
International Petrochemical Co. (SIPC), has announced work will start on an
11-billion-dollar plant in the Gulf town of Jubail, newspapers reported Thursday.
The SIPC plant will be fully operational by the end of 2003, the Arab
News quoted company chairman Abdulaziz al-Zamil as saying.
Qafco in Norsk unit deal
Qatar Fertilisers Co (Qafco), a Qatari joint venture with Norway's
Norsk Hydro, said on Thursday it had signed a deal with Hydro France, a Norsk unit, to
market 150,000 tonnes a year of urea in South Africa.
Iran's first alumina project hits snag
Iran's first major alumina project contracted to a Czech company has
run into a hitch over its design, Iranian sources said on Thursday.
The project in northeastern Jajarm region was due to go on stream last
September with an ultimate annual production capacity of 280,000
Oman said on Thursday it had exported the first shipment of liquefied
natural gas (LNG) to the United States as part of a short-term agreement with Coral
Energy, the gas marketing arm of Royal Dutch/Shell Group.
"This is the first LNG cargo to the US as part of the short-term
agreement with Coral Energy. The second and final delivery will be sent in August,"
an LNG spokesman in the ministry of oil and gas, told Reuters.
He said the first cargo was 60,000 tonnes of LNG.
Iraq establishes fund
Iraqi authorities have established a special fund to encourage economic
projects in the sanctions-hit country, newspapers reported Tuesday.
The fund will have an initial capital of 50 billion dinars (25 million
dollars) and 50 million euros "to finance activities in the private, mixed and
cooperative sectors in the framework of reactivating the economy." The fund will
grant loans to businessmen on their presentation of a feasibility study of projects they
wish to launch, papers said.
IDB gets $84 mln financing
Saudi-based Islamic Development Bank (IDB) signed an agreement
Wednesday to receive an $84 million financing facility, co-arranger Gulf International
Bank (GIB) said.
"The facility which is for $84 million was jointly arranged by
Gulf International Bank and Kuwait Finance House," Bahrain-based GIB said in a
It said a number of other banks had taken part in the deal, including
Standard Chartered Bank, ABN-Amro Bank, Arab National Bank, Beit Ettamwil TounsiSaudi
(BEST Bank), Dubai Islamic Bank, Jordan Islamic Bank for Finance and Investment, and Al
Aqsa Islamic Bank.
Syria allocates $1.7 bln to find new jobs
The Syrian government has allocated 80 billion Syrian pounds ($1.7
billion) as part of an emergency plan to fight its growing unemployment problem, Prime
Minister Mohammed Mustafa Mero said.
A senior official on Monday quoted Mero as saying during a special
meeting held at the planning ministry on Sunday that the emergency plan was aimed at
finding jobs for the unemployed both in the private and public sectors.
He gave no figures for the number unemployed but economic sources said
the government needed to provide jobs for some 200,0000 new workers every year.
New polyethylene plants
The giant Saudi Basic Industries Corp. (SABIC) has opened two new
polyethylene plants with a total capacity of 485,000 metric tonnes a year, newspapers
reported on Friday.
A 220,000-tonne factory for low density polyethylene started production
on June 11 in the industrial city of Jubail on the Gulf coast and a 265,000-tonne plant
for high density product was launched on June 9 in the Red Sea city of
Iraq building six new refineries
Iraq is building six small refineries and the first will come on stream
later this month, an Iraqi newspaper said on Sunday.
The official al-Qadissiya, quoting Industry Minister Adnan Abdul-Majeed
Jassim, said a new refinery with a capacity of 10,000 barrels per day (bpd) was being
built in the town of Baiji, 220 km (138 miles) north of Baghdad.
"Ministry technicians in cooperation with experts from the oil
ministry are about to finish a refinery at Baiji which will be operational this
month," Jassim said.
Damascus, Istanbul rail link opens
A new 1,500 kilometre (940 mile) train service linking Damascus with
Istanbul in Turkey was inaugurated Tuesday, the railway company said Wednesday.
The once a week service will enable passengers to book through from one
city to another for the first time since the collapse of the Ottoman empire in 1918.
Suez Canal income seen topping $2 bln
Higher oil prices and the recovery of Asian markets are expected to
push up revenues of Egypt's Suez Canal this year to well above 1999's $1.86 billion, the
head of the Canal Authority was quoted as saying on Tuesday .
"We expect revenues to exceed $2 billion during the current
year," the United Arab Emirates' al-Bayan newspaper quoted Ahmed Fadel as saying in
Egypt's second biggest pyramid will reopen soon following a year-long
facelift that involved scraping salt, lipstick and graffiti off inner walls. Zahi Hawass,
director of the Giza plateau where Egypt's three great pyramids sit, said restoration work
on the 4,500-year-old pyramid of Khafre (Chefren) had just finished and tourists would be
treated to a more impressive display.