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Jul 24 - 30, 2000

Saudi makes good on vow to boost oil output

Saudi Arabia is making good on its pledge to lift oil output by 500,000 barrels per day (bpd) and has already turned up its taps by half that amount, industry sources said on Wednesday.

The remaining 250,000 bpd is due to be pumped in August.

The Saudi move puts its two-week-old initiative to unleash new barrels to tame runaway prices back on track.

Saudi Arabia's plans appeared to be shelved, especially after OPEC President Ali Rodriguez announced on Tuesday that there was no need for a cartel output rise because prices had fallen below a $28 threshold for additional supplies.

The kingdom, the world's biggest oil exporter, has already turned up its taps by 250,000 bpd and aims to lift output by the same amount starting from August 1, the sources added.

The extra Saudi barrels will head for markets in the United States and the Far East, they said. Customers there in recent days received notice of some of the extra August volumes.

"The extra 250,000 (bpd) are available for customers right now," said an industry source familiar with oil policy in OPEC powerhouse Saudi Arabia.

Shortly after news of the extra Saudi barrels, OPEC Secretary General Rilwanu Lukman said the group was prepared to raise production by 500,000 bpd if prices stayed high for too long. Speaking on a visit to OPEC-member Venezuela, Lukman declined to comment on what he called speculation that Saudi Arabia had begun pumping extra oil and insisted there was no disarray in the cartel.

Also speaking in Caracas, Rodriguez repeated he had received assurances from Saudi Arabia that OPEC's biggest producer would not go alone on an output increase to ease sizzling prices.

Mexico, a non-OPEC producer that has masterminded a series of output deals along with Saudi Arabia and Venezuela, said world oil producers should move quickly to crank out more crude.

Syria and Jordan to boost ties under new leaders

The new young leaders of Syria and Jordan agreed on Wednesday to boost relations which were often strained during the rule of their late fathers.

Officials said Syrian President Bashar Al-Assad, who took office on Monday, and Jordan's King Abdullah, who assumed power last year, had agreed during a meeting in Damascus to revive a joint economic commission and boost commercial exchanges.

They said Bashar had agreed to provide Jordan with water to help it tackle the consequences of a regional drought.

They did not specify any quantity and said this would be agreed by the respective water authorities.

Syria has several dams close to the border with Jordan.

Relations worsened after Jordan's late King Hussein signed a peace deal with Israel in 1994 which Damascus saw as a sell-out.

But they started to improve again when the late Syrian president, Hafez Al-Assad, attended King Hussein's funeral in Amman last year and began to develop a good relationship with his son, who has visited Damascus several times.

The elder Assad died last month aged 69 after ruling Syria for 30 years.

A Syrian spokesman said Abdullah and Bashar had held two rounds of talks, one of them in private.

He said they discussed not only Arab and regional issues but also economic cooperation.

In a message after leaving Damascus, Abdullah, the second Arab leader to visit Syria since Bashar took the oath of office, told him: "Your brothers in Jordan look to you with great hope and optimism. We want to achieve the highest level of cooperation between our countries for the benefit of our people.

Hope revives in Camp David summit

A marathon Middle East peace summit called to resolve the Israeli-Palestinian conflict came back from the dead on Thursday after the White House announced it had ended in failure.

Within an hour of White House spokesman Joe Lockhart announcing the end of the talks without a deal, Israeli and Palestinian officials said their leaders had agreed to stay on at Camp David while US President Bill Clinton travels to Japan for a Group of Eight nations summit.

Lockhart said in a message to reporters gathered at the gates of the hilltop presidential retreat shortly before 11 pm EDT (0300 GMT Thursday): "The summit has come to a conclusion without an agreement."

But before Clinton, who invested much of his remaining political prestige and persuasive powers in trying to broker a deal between Israeli Prime Minister Ehud Barak and Palestinian President Yasser Arafat, could make a final statement on the talks, fresh hope appeared to have flickered.

Egypt economy is wobbling

Egypt's economic growth prospects have yet again been put to question by a new report showing less than favourable results with respect to economic performance.

A report by the Middle East Economic Digest (MEED), noted that Egypt's economic performance has wobbled over the past 18 months.

Citing revised actual figures for the 1998/99 (July-June) budget, the report says that the Egyptian government took a long time to acknowledge the extent of the economic downturn the country has experienced since the start of 1999.

The figures had shown a deficit more than four times higher than the previously announced figure — which had already been revised to account for falling oil revenues, according to the report.

At 4.2 per cent of gross domestic product (GDP), the deficit is substantially higher than the figure of 1 per cent of GDP blithely quoted by government ministers on every possible occasion as an illustration of Egypt's sound macroeconomic health, the report says.

Iran, Qatar eye more trade, economic relations

Iran and the Gulf Arab state of Qatar agreed on Tuesday to develop trade and economic ties by avoiding double taxation and promoting joint investment, the Iranian news agency IRNA reported.

Other agreements, signed at the end of a visit by the Qatari Emir Sheikh Hamad bin Khalifa Al-Thani to Tehran, called for more technical, medical and cultural exchanges, IRNA said.

The two countries are also to launch direct flights between the Qatari capital Doha and Iran's northeastern city of Mashhad, a major pilgrimage destination for Shi'ite Muslims.

In a joint statement quoted by Iranian state television, Iran and Qatar expressed concern over "Israel's production, storage and proliferation of weapons of mass destruction" and support for the Palestinians.

Sheikh Hamad earlier held talks with Iranian President Mohammad Khatami and supreme leader Ayatollah Ali Khamenei.

Oil falls below $28

The price of OPEC's basket of seven crudes fell to $27.46 a barrel on Monday from $28.84 on Friday, OPEC's Vienna secretariat said on Tuesday.

OPEC President Ali Rodriguez told cartel members on Monday to prepare to lift output by 500,000 bpd if the basket price stays high. But Monday's price for the basket takes it below the $28 threshold that is supposed to trigger extra output.

Iran's Oil Minister Bijan Zanganeh said on Tuesday that the price must stay above $28 for 20 consecutive trading days after July 1 to trigger the increase.

French Alstom gets Bahrain deal

State-owned Bahrain Petroleum Company (Bapco) said on Monday it had awarded French firm Alstom a 12 million dinar ($31.8 million) contract as part of its modernisation programme.

The engineering, procurement and construction contract was signed with the French transport manufacturer in Bahrain on Sunday, the statement said.

"The aim of the project was to modernise the low-sulphur fuel oil and fluid catalytic cracking complexes instrumentation and control systems with modern, state-of-the-art electronic technology," it added.

The project is scheduled to start in September for completion in July 2004. Bapco plans to spend around $700 million to upgrade and modernise its 250,000 barrels-per-day ageing oil refinery which was built in 1936.

Lebanon expects little financial aid

Lebanese Prime Minister Salim Hoss said Sunday that no important financial aid was expected from donor states taking part later this month in the first international meeting on rebuilding south Lebanon after the end of Israeli occupation in May.

"We do not expect the first meeting on July 27 to adopt decisions for any defined financial commitments to help Lebanon," Hoss said in a statement. "We should not build unrealistic hopes on the first meeting." Hoss said Lebanon agreed with the United Nations that "the conference of donor countries and organizations be held in two phases." The July 27 meeting, at the ambassadorial level, will "study Lebanon's needs for development and reconstruction, focusing on the liberated regions and nearby areas," he said.

Egypt Aluminium

Egypt Aluminium Co said on Wednesday it plans to increase its capacity to 300,000 tonnes per annum over the next seven years.

In a statement sent to Reuters in response to questions, the company said capacity was due to rise to 245,000 tonnes in 2003 and would reach 300,000 tonnes by 2008. Egypt Aluminium's capacity reached 195,000 tonnes in 1998.

Bashar: No 'magic wand' to reform Syrian economy

Syrian President Bashar Al-Assad pledged on Monday to draft policies for boosting the competitiveness of the state-dominated economy, but warned there was no "magic wand" to bring about immediate reform.

"It is necessary to draft a wise economic policy to address the imbalances between our imports and exports, to redress our balance of payments, to reform our economy so that it can take its role in the new world order," Assad said in his inaugural speech before parliament after taking the oath of office.

He said it was necessary for Syria to move steadily towards economic changes by modernising its laws, breaking down bureaucratic obstacles, recruiting private and public capital and creating better job opportunities.

New gas field discovered in Saudi Arabia

Saudi Arabia has announced the discovery of another new gas field in the eastern part of the Kingdom. The new field is estimated to have a flow of 17 million cubic feet (481,400 cubic metres) per day.

The drilling at the Al-Ghazal field, 100 km west of the Haradh gas field began on April 28. Some 2,500 barrels of condensates per day was also expected to flow out of the new find. This new finding is the eighth discovery of hydrocarbons in commercial quantities, in the area south of Ghawar. More tests and drillings are to be conducted by Saudi Aramco in the area to identify and explore more gas reserves.

Arabs urge

The Arab League said Monday it has urged Britain to reconsider plans to help finance a dam in southeast Turkey amid concerns it would displace too many people and drain water for neighboring Iraq and Syria.

The 22-member league, which includes Iraq and Syria, sent a letter to British Foreign Secretary Robin Cook saying the dam violates international law on non-navigation uses for shared rivers, a league official said.

SABIC

The Saudi industrial giant SABIC more than quadrupled its net profits to 549.3 million dollars in the first half of 2000 compared to the same period of last year, the company announced Tuesday.

Before a recovery in oil prices, SABIC's net profits slumped to 130 million dollars in the first half of 1999, down 36 per cent compared with the same period of the previous year.

Kuwait to resume production

A gasoline unit at Al-Ahmadi refinery untouched by a deadly explosion that brought production to a standstill last month is expected to be back in operation from July 25, a senior Kuwaiti oil official said Sunday.

"The unit is currently undergoing final testing and is expected to be ready for operation on July 25," Rajeh Al-Omair, head of public relations at Kuwait National Petroleum Co. (KNPC), told.

All of the unit's production of 40,000 barrels per day (bpd) of fuel will be used for domestic consumption, Omair said.

Two banks set to merge

Bahrain's Al-Ahli Commercial Bank and the London-based United Bank of Kuwait (UBK) are set to merge by August and will be listed on the Gulf state's stock market, a newspaper reported on Saturday.

Bahrain Tribune said the merger would be formalised after approval from the shareholders of the two banks.