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Nov 13 - 19, 2000

Saudi Arabia to attend OIC moot

Saudi Arabia is to attend next week's Islamic summit after Qatar bowed to its demand to break links with Israel over the "deteriorating situation" in the Palestinian territories, organizers of the summit said.

"The Saudi deputy foreign minister, Nizar Obeid Madani, will represent his country at the preparatory ministerial conference of the Islamic summit in Doha, Qatar having agreed to close the Israeli trade bureau in Doha," an official of the Organization of the Islamic Conference (OIC) said.

Qatar said on Thursday it was closing an Israeli trade office in its capital Doha, after coming under pressure to cut its low-level ties with the Jewish state before the Islamic summit.

Qatari officials said the decision was linked to the killings of Palestinians by Israeli troops in six weeks of violence in the West Bank and Gaza strip.

The United States on Thursday lamented Qatar's decision to close Israel's trade office there, a move that one senior official said was a setback in efforts to quell continuing violence in the Middle East.

"We would like people to hold fast with their relationships while we try to calm the violence and get back to the peace process," a senior State Department official told AFP as Palestinian leader Yasser Arafat arrived here for talks with President Bill Clinton.

"We don't think this is the occasion to be severing the ties which are needed to re-establish a sense of direction for the region," the official said.

A Qatari spokesman said the move would allow the success of OIC summit by reinforcing Arab solidarity against Israeli repression of the Palestinians.

Washington has been urging Arab states with ties to Israel not to cut them, arguing that dialogue of any kind with the Jewish state is helpful in finding a way to end the clashes.

OPEC may discuss price mechanism

OPEC is likely to discuss the possibility of suspending the upper $28 a barrel limit on its price band mechanism for six months to a year when it meets on November 12 in Vienna, oil industry sources said on Thursday.

It is also likely to discuss potential output cutbacks early next year, they said.

"The market is full of crude oil and still we have high oil prices," said one industry source. "There are flaws with this price band system".

OPEC last week raised production by 500,000 barrels per day under its price band mechanism which commits the cartel to raise or cut output by that amount if a basket price of its crude strays from a $22 to $28 price band for 20 consecutive working days.

The industry sources stressed that oil market fundamentals do not warrant a further production increase and that prices were still being politically driven by the US presidential elections and violence in the Middle East as well as by logistical problems with US heating oil.

They said prices could ease slightly once the US elections results are decided and Middle East tension eases.

They said an anticipated build up of oil stockpiles will see prices declining more dramatically early next year.

"Given current production there will be an unusually high stock build in the fourth quarter which will put pressure on prices early next year, especially the second quarter," said another industry source.

He reckoned the average stock build for this year would run at 1.3 to 1.4 million bpd.

Algeria said on Wednesday it would call for an OPEC meeting in January to discuss the market situation and possibly decide a cut in oil production to avoid a price drop in the second quarter of 2001.

But Algerian Oil Minister Chakib Khelil said that OPEC should add a further 500,000 bpd by the end of November if the price band mechanism dictates it.

Bahrain projects $833m deficit

Bahrain on Sunday projected a combined budget deficit of 314 million dinars ($833 million) for 2001 and 2002, the Gulf News Agency reported.

The 2001/2002 budget forecast revenues of 1.344 billion dinars 669 million for 2001 and 675 million dinars for 2002.

It projected a total expenditure of 1.658 billion dinars for the two-year budget 823 million dinars for 2001 and 835 million dinars for 2002.

The 314 million dinar budget deficit for 2001/2002 is slightly lower than the 320 million dinar deficit Bahrain had projected for its 1999/2000 two-year budget.

The agency said Bahrain's cabinet, at an ordinary meeting on Sunday, ratified the budget forecast which also allocated 160 million dinars for development projects for each 2001 and 2002.

Bahrain has been issueing government treasury bills and bonds to finance its budget deficit and development projects in the past few years, but it was unclear if it will continue the practice in the next two years.

Iraq becomes Morocco's top crude oil supplier

Iraq exported to Morocco 2.31 million tonnes of oil between January and October, up 24.5 per cent on a year earlier and catapulting Iraq to first place in the list of the country's oil suppliers, a senior official said on Tuesday.

"Iraq is now the leading supplier of our crude oil needs," an official of the country's sole oil port in Mohamedia told Reuters.

In the first 10 months of last year, Morocco imported 1.85 million tonnes of Iraqi crude oil.

Saudi Arabia and Iran are respectively second and third crude suppliers of this north African country, the official added.

Morocco, which has no oil of its own, imported in the January-October period a total of 6.03 million tonnes of crude, up from 6.01 million tonnes a year earlier, the official said.

Morocco's Energy and Trade Minister Mustapha Mansouri landed in Baghdad on Tuesday at the head of a business delegation, after taking the first direct flight between the two countries since the 1991 Gulf War.

Arafat, Clinton to meet as clashes continue

Palestinian President Yasser Arafat will hold talks with US President Bill Clinton in the latest American effort to end six weeks of clashes that has hobbled the Middle East peace process.

Israeli Prime Minister Ehud Barak, who is to see Clinton on Sunday, said that only the resumption of talks between the two sides could lead to the independent state Arafat wants to declare by the end of the year.

Providing a gloomy backdrop for Arafat's arrival in Washington, six more Palestinian martyrs on Wednesday brought to at least 170 Palestinians the death toll from the Intifada.

"Negotiation can lead to the establishment of a Palestinian state with Israel's agreement that will be a stabilizing force in the area and serve the interests of the world," Barak told Israel's Channel One television late on Wednesday.

Senior Palestinian negotiator Hassan Asfour told Reuters Barak could not dictate the terms of the declaration.

Egypt to invest $10b

Egypt's oil ministry has drawn up a plan to invest $10 billion in petrochemical projects over the next 20 years, the official Middle East News Agency (MENA) said.

MENA quoted Oil Minister Sameh Fahmy as saying the projects would produce 15 million tonnes a year of petrochemicals worth about $7 billion. This would cover local needs now met by imports and would allow exports worth $3 billion a year.

Fahmy said the plan, which would create 100,000 jobs, had been prepared by staff of the state Egyptian General Petroleum Corporation and British experts over the past eight months.

He said the first petrochemical project was slated to be built in the Mediterranean coastal town of Damietta using natural gas from deepwater offshore fields as feedstock.

Syria hosts investor conference

Some 400 potential investors, including the International Finance Corporation (IFC), a branch of the World Bank, gather for a conference in Damascus Thursday aimed at promoting the Syrian economy.

"The international conference for investment in Syria," is the first forum of its kind to be organised in Damascus since the start of the policy of economic openness some ten years ago.

Syria hopes the conference will promote a "useful dialogue" among financial circles invited to contribute to the modernisation of its economy, run since 1963 on the socialist principles of the ruling Baath party, according to the party's official paper.

Saudi hospital to sue tobacco firms for $5b

A Saudi hospital said on Monday it would sue international tobacco companies and their local agents for $5 billion to compensate for the cost of treating lung diseases including cancer, the Saudi Press Agency said.

It quoted Anwar Abdul-Majid Jabarti, executive general manager at King Faisal Specialist Hospital and Research Centre in Riyadh, as saying the hospital had a legal right to sue the unidentified tobacco firms and their local agents.

He said the hospital had appointed a lawyer to handle the case and urged local and Arab hospitals to follow suit.

Iraq, Jordan sign an agreement

Iraq and Jordan signed an agreement on Friday under which Baghdad will supply Amman with five million tonnes of crude oil and by-products this year.

"Iraq will supply Jordan with four million tonnes of crude oil and one million tonnes of by-product and this represents Jordan's needs for crude and by-products," Jordanian Prime Minister Ali Abu Al-Ragheb told reporters.

"We have agreed on $20 as a ceiling for the price of a barrel with a discount of 40 per cent for every increase over $20," he said, adding: "There is an additional discount of $3 a barrel regardless of the price of oil...this is a special discount.".

Iran plans to double oil output

Iranian Oil Minister Bijan Namdar Zangeneh announced Saturday that Iran will "double its production capacity between now and the year 2000" to hold its own with the OPEC cartel.

"Iran has 15 per cent of the total crude output of OPEC. To sustain that per centage, we are going to have to double our production capacity between now and 2020," Zangeneh said during an international conference on the impact of oil from the Caspian Sea and the Middle East on world markets.

Kuwait Airways

Kuwait Airways Corp. (KAC) posted a profit of 77.2 million dollars in the fiscal year which ended on June 30, going into the black for the first time since the 1991 Gulf War, an official report showed on Sunday.

Syria seeks breathing space

The recent land mark agreement between Iraq and Syria to reopen the crude oil pipeline between them closed since 1982 may spell badly needed relief for the Syrian government.

Equally important the stabilization of the Syrian economy is the strengthening of Syrian president Bashar Al Assad's own political base in the country. But according to some analysts, the prospects of relative economic relief may actually work to lessen the government's enthusiasm towards more long term economic reforms.

Iran woos Gulf tourists

The Iranian government is wooing tourists from Gulf states by scrapping visas requirements for short trips, radio Tehran announced Monday. The move, the first of its kind that Tehran has taken concerning its Gulf neighbours, was agreed by the council of ministers late Sunday, with President Mohammad Khatami presiding over the meeting. Up to now visitors from Gulf states have needed to apply for a short-stay visa for visits of up to three months.

The move was taken "to encourage visits to Iran by citizens of Persian Gulf states," the radio said. Many people in the Gulf, especially living in the United Arab Emirates and Bahrain, are of Iranian origin.

Russian trade delegation

A Russian delegation headed by a deputy minister for industry, science and technology, Alexander Pivovarov, flew into Baghdad on Monday for talks on bilateral cooperation. The 17-strong delegation will hold talks with Iraqi officials, the INA news agency reported.

Another delegation of 250 Russian deputies, oil executives and other industrialists flew into Iraq last week to participate in the Baghdad international trade fair.

Iraq, Egypt resume diplomatic relations

A big rift in the Arab unity was mended on Tuesday with the re-establishment of Iraqi-Egyptian diplomatic relations according to an Arab diplomatic source in Baghdad.

Full diplomatic relations between Iraq and Egypt was cut off in 1991 due to the Gulf War.

"The Egyptian interests section in Baghdad was Monday turned into an embassy which represents Egypt," the diplomat who asked for anonymity told AFP news agency.

The decision came following a series of reciprocal visits by senior Iraqi and Egyptian officials and the "improvement of relations between the two countries," he added.