Jul 31 - Aug 06, 2000

Kuwait oil minister in Iran talks on oil, borders

Kuwait's Oil Minister Sheikh Saud Nasser Al-Sabah arrived in Tehran on Monday for talks with Iranian officials on the oil market and border disputes.

Sheikh Saud, quoted by Iran's state television, said after arriving that his visit was part of efforts for greater bilateral cooperation with fellow OPEC member Iran.

He said he would discuss OPEC-related issues and "oil market conditions" with his Iranian counterpart Bijan Zanganeh.

Zangeneh, who greeted Sheikh Saud at the airport, said the two countries sought "greater coordination" on the oil market.

He said the two countries would also discuss plans to settle a border dispute over areas in the northern Gulf.

"This visit could be a good start for specifying border territories," he said.

The border disputes resurfaced earlier this year when Iran started drilling for gas in Al-Dorra offshore field which is claimed by the three OPEC states Saudi Arabia, Iran and Kuwait.

The drilling was later stopped after protests by Saudi Arabia and Kuwait.

The Kuwaiti minister told Reuters before leaving on his three-day visit that his country had no plans to unilaterally raise oil output and cited the cartel's price mechanism as a deciding factor in any OPEC decision.

Commenting on the current oil price he said: "It is a fair price considering the (summer) season now ... it is a usual adjustment of prices." Sheikh Saud is to hold talks on Tuesday with Iranian President Mohammad Khatami.

Jordan sees economic growth speeding up

Jordan's Finance Minister Michel Marto said on Tuesday accelerated IMF-backed reforms would boost growth in 2000-2001 after three years of sluggish activity.

Marto said recent consultations with an IMF mission to complete a second review of the three-year programme begun last year focused on setting targets to extend structural reforms essential for more balanced and sustainable growth.

"Expanded reforms will lead to new investments and further growth...We are moving ahead," Marto told Reuters.

The International Monetary Fund executive board will meet later on Tuesday to assess Jordan's performance under the programme which secured it $128 million SDR financing under an EFF (Extended Fund Facility).

Jordan has been running annual gross domestic product growth of around 1.5 per cent in the last few years.

Marto said growth could be over three per cent, the annual rate of Jordan's population growth, this year with signs of a turnaround in tourism and services and more investments.

"Jordan has been struggling to raise growth for the last three years but we now see light at the end of the tunnel," he said.

A free trade accord (FTA) with Washington expected by September and the transfer of the Red Sea port of Aqaba into a special economic zone would act as a magnet for investors.

These along with new projects in mining and tourism should stimulate growth to 4.0 per cent or more by 2001, but this hinged on further fiscal restraint, monetary stability and vigorous advance in reforms, Marto said.

So far inflation has been kept under one per cent while foreign reserves now stand at a record $2.8 billion.

Regional body studies $2 bln Gulf Arab gas grid

A Gulf regional body said on Tuesday it was carrying out a feasibility study on a long-standing proposal to build a gas network linking Gulf Arab states at a cost of up to $2 billion.

"The (gas) project will be implemented in cooperation with the private sector and is separate from other similar projects," said Ihsan Bu-Hulaiga, secretary-general of the Gulf Organisation for Industrial Consultancy (GOIC).

Hulaiga declined to give further details, adding that a meeting of the technical committee for the Gulf Cooperation Council (GCC) gas network was closed to the media.

GCC states — Saudi Arabia, Kuwait, Qatar, Bahrain, Oman and the United Arab Emirates — requested GOIC to carry out the study for the regional gas grid in 1993.

The Doha-based GOIC promotes industrial cooperation between Gulf Arab states. It groups the six GCC states and Iraq, whose membership has been frozen since it invaded Kuwait in 1990.

The GCC gas grid, proposed by GOIC in the mid-1990s, aims to transport Qatar's North Field gas in the first stage to Saudi Arabia and Kuwait. The pipeline would be extended to other Gulf Arab states in the second stage.

OPEC crude basket fell to $25.70

The price of OPEC's basket of seven crudes fell to $25.70 a barrel on Monday from $26.33 on Friday, OPEC's Vienna secretariat said.

The price remains well below the $28 threshold that would trigger extra supply from OPEC.

Under an informal mechanism agreed between OPEC producers in June, if the basket stays above a $22-$28 band for 20 working days or below the range for 10 working days, crude production will be adjusted by 500,000 barrels a day either way to try to bring the price back into the range.

The basket has been inside the band since July 19.

The OPEC basket comprises Algeria's Saharan Blend, Indonesia's Minas, Nigeria's Bonny Light, Saudi Arabian Light, Dubai of the UAE, Venezuela's Tia Juana and Mexico's Isthmus.

Arab exporters post highest oil income

The Organisation of Arab Petroleum Exporting Countries (OAPEC) said a 42 per cent rise in crude prices in 1999 rocketed the oil income of its member states to 104.1 billion dollars, the highest level since one of 145 billion dollars in 1982.

Oil revenues increased by 27.3 billion dollars last year from 76.8 billion in 1998, the 10-nation OAPEC said in an annual report, quoted by Kuwait's official news agency KUNA on Saturday.

Budget deficits in 1999 either disappeared or sharply dropped due to the oil price rise, and countries such as Kuwait and Libya recorded positive growth rates after experiencing negative growth in 1998.

Founded in 1968, the Kuwait-based OAPEC groups Bahrain, Egypt and Syria with seven members of the more influential OPEC: Algeria, Iraq, Kuwait, Libya, Qatar, Saudi Arabia and the United Arab Emirates.

Annan approves plan for Iraq

UN Secretary General Kofi Annan approved the biannual distribution plan for humanitarian supplies for Iraq bought with oil revenues through the UN's oil-for-food programme, the United Nations announced Wednesday.

The sum allocated for supplies to Iraq is of 7.131 billion dollars, with 1.216 billion of that for food, from June to December 2000, according to the UN Office of the Iraq Programme.

The program allocates 757 million dollars for housing, 752 million for electricity and 600 million dollars for replacement equipment for the oil industry.

Food supplies are geared for the first time to providing the 2,472 calories per day recommended by the United Nations.

Under the embargo imposed since Iraq invaded Kuwait in 1990, Iraq can sell supplies of crude oil in exchange for supplies of food, medicine and essential goods, under strict UN supervision.

Lebanon seeks $6.56 bln in development aid

The Lebanese government said on Monday it would ask a meeting of potential donor nations this week to finance more than $6.5 billion in development projects following Israel's withdrawal from south Lebanon.

Economy Minister Nasser Saidi said Lebanon's appeal would include $1.3 billion to rehabilitate areas damaged by 22 years of Israeli occupation, $260 million in emergency aid and another $5 billion for other backward areas of the country.

Arafat determined to declare state

Palestinian leader Yasser Arafat said Wednesday he was determined to declare an independent state on September 13, the deadline set for a full peace agreement with Israel.

"We signed an agreement in Sharm El-Sheikh with the government of (Israeli Prime Minister Ehud) Barak and September 13 is the date for the declaration of our state," Arafat told reporters here, referring to a deal signed in 1999.

Kuwaiti stocks dip

The Kuwait Stock Exchange (KSE) closed the week Wednesday at a three-month low amid a traditional summer lull in trading and the government's reticence to implement any economic reforms.

The KSE index closed at 1,381.5 points, down 0.3 per cent on the week, 4.2 per cent on the end of 1999 and a staggering 51.3 per cent on its all-time high in November 1997.

The week's trading value dropped sharply to a daily average of just over two million dinars (6.5 million dollars) from over three million (9.8 million dollars) in past weeks.

National Bank of Yemen

Yemen has agreed to sell 80 per cent of the state-owned National Bank of Yemen as part of a privatisation drive underway in the poor Arab state, a senior government official said on Tuesday.

BMCI to issue $38 mln of bonds

Morocco's blue-chip BMCI Bank will issue 400 million dirhams ($38 million) of bonds to finance the bank's expanding activity, the bank said on Tuesday in a statement. Subscription date will be opened on July 31 and closed on August 21, the statement added.

Syria with water this summer

Syrian Water Minister Taha al-Atrash said Thursday that his country will provide Jordan with 3.5 million cubic meters of water this summer. Atrash, who was speaking at a joint press conference with his Jordanian counterpart, Hatem Halwani, said the water would be pumped over the next two months.

UAE to award power contract

The United Arab Emirates is set to award a Franco-Belgian consortium of TotalFinaElf and Tractebel a contract for a power generation project worth 1.3 billion dollars, a newspaper reported.

The contract to upgrade and refurbish Taweelah A-1, Abu Dhabi's second independent power and water plant, was expected to be signed next week, the Gulf News said.

TotalFinaElf-Tractebel beat off bids from US firms CMS Energy Corp., Enron Corp. and

Oman sets up firm

Oman has set up a state firm with an initial capital of 500,000 rials ($1.3 million) to oversee and invest in natural gas projects in the Gulf Arab state, a company official said on Thursday.

"It is a state-run company registered as Oman Gas Company and its primary objective is to invest and oversee natural gas ventures such as the gas pipeline project and the joint Bukha-Henjam offshore project," the official told.

Yemen oil revenues to hit 1.4 bln

Yemen's oil revenues are set to reach 1.4 billion dollars in 2000, up 40 per cent on 1999, Oil Minister Mohammed Al-Khadem Al-Wajih said Tuesday.

"Oil revenues for the current year will top 1.4 billion dollars," he said, quoted by the official SABA news agency.

Yemen's oil revenues hit one billion dollars in 1999, double the figure of 1998, thanks to a dramatic recovery in world oil prices.

A non-OPEC producer, Yemen has stepped up exploration and production-sharing agreements with foreign firms to raise its expected output to 700,000 barrels per day (bpd) from the current level of less than 500,000 bpd.

Emirates to sign $2.27 b A3XX deal

Dubai government-owned Emirates airline will sign a $2.27 billion deal on Monday to buy 10 A3XX superjumbo planes from the European consortium Airbus Industrie, a local newspaper reported.

The Arabic-language Al-Bayan daily quoted informed sources at Emirates as saying company chairman Sheikh Ahmed bin Saeed Al-Maktoum was due to ink the deal on the sidelines of Britain's Farnborough International Air Show.

Syrian president orders creation of IT departments

Syria's new President Bashar Al-Assad issued a decree Saturday calling for the creation of internet technology departments at four Syrian universities, government officials said.

Assad, who heads the Syrian scientific society for information technology (IT), and has pledged to take his technologically under-developed country into the internet age.

Iran to sign $4.3 b gas contracts with ENI

The Italian firm ENI is due to sign two gas contracts with Iran shortly totalling 4.3 billion dollars, in one of the largest contracts between Tehran and a western firm since the 1979 Islamic revolution, an Iranian oil official said Sunday.

The contracts call for the development of five zones of a giant gas deposit with a total area of 3,700 square kilometers (1,480 square miles), some 100 kilometers (60 miles) into the Gulf near Qatar.

The contract will be signed Thursday between ENI and both the Iranian government and the Iranian firm Petro-Pars, the oil ministry official said.

Syria-Lebanon relations

The recent statement by a Muslim minister that relations with Syria should be revised has taken many Lebanese by surprise.

Such calls, in the open, are usually the domain of Christians, unhappy about the Syrian domination of Lebanon, which they feel alienates them politically and hurts their country's sovereignty.

But Najib Mikati, minister of transportation and public works, said last week that relations between Lebanon and Syria must be revised to 'healthy relations'.