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Dec 11 - 17, 2000

UN allows Iraq to use funds

The United Nations Security Council, through a resolution on Tuesday, allowed Iraq to use the accumulated funds from its "Oil-for-food" programme on rebuilding its oil infrastructure and for alleviating poverty.

Under the programme, Iraq is allowed to sell its petroleum and petroleum products and use the funds for humanitarian goods, compensation to victims claiming damages as a result of Baghdad's invasion of Kuwait, and certain other expenses.

The council decided to reduce the proportion of funds allocated to the compensation fund from 30 per cent to 25 per cent, and to use the five per cent difference for "strictly humanitarian projects to address the needs of the most vulnerable groups in Iraq."

The resolution was anticipated after an agreement was reached in late September among the five permanent members of the Security Council to award some $15.9 billion to the Kuwait Petroleum Corporation from the fund.

A UN spokesman reported that the permanent five settled that claim while agreeing to reduce the percentage of funds received by the commission from the sale of Iraqi oil and to use the difference for the humanitarian programme.

The resolution also requested the secretary-general to make necessary arrangements, subject to council approval, to allow funds of up to 600 million euros deposited in the escrow account to be used "for the costs of installation and maintenance, including training services, of the equipment and spare parts for the oil industry." It also called upon the Iraqi government to cooperate in the implementation of such arrangements.

It's the first time since the oil-for-food's programme's establishment in 1995 that the council expressed its "readiness to consider, in the light of the cooperation of Iraq in implementing all the resolutions of the council, allowing a sum of 15 million dollars to be drawn from the escrow account to be used as payment of the arrears in Iraq's contribution to the budget of the United Nations."

Saudis to fill Iraqi oil gap

OPEC power Saudi Arabia vowed Monday to take definite action, with other oil producers, to fill any gap in supplies created after Iraq suspended its oil sales of more than two million barrels per day (bpd).

"Saudi Arabia, in coordination with other producers, will definitely fill the gap left by the suspension of Iraqi oil exports," a Saudi source said. "But the timing is not yet definite."

Iraqi oil exports ground to a halt Friday after Baghdad demanded that buyers of its crude pay a 50-cent per barrel surcharge outside the terms of the United Nations oil-for-food program.

As the halt in Iraqi oil loadings lengthens, big volume end-users of Baghdad's output are looking increasingly to Saudi Arabia, the world's biggest oil producer, to help supply alternatives, industry sources said.

U.S. refiners may be particularly unnerved, especially after Baghdad threatened at the weekend to punish any company selling its crude oil into hostile countries, namely the United States, market sources said.

The Saudi source repeated that the kingdom is continuing to hold consultations with fellow oil producers and the International Energy Agency about a course of action.

"The result (of the discussions) will be definite," he said.

Washington repeatedly has said it can look to key ally Saudi Arabia to help fill any shortfall in Iraqi supplies or possibly draw down industrialized nations' strategic reserves.

But Iraqi Trade Minister Mohammed Mehdi Saleh said Sunday that OPEC will find it difficult to replace the full volume taken out of the market by Iraq.

"Compensating Iraq's share, which is 2.5 million bpd, which is not a small quantity, will be difficult," Saleh said.

Saudi Oil Minister Ali al-Naimi said recently that the kingdom can bring on an extra 1.8 million barrels per day in 90 days.

Iraq to host first Arab ministerial meeting in a decade

A group of Arab trade ministers decided Wednesday to meet in Iraq next year for the first Arab ministerial meeting there since the invasion of Kuwait by Iraqi troops in 1990, Iraq's trade minister said.

Ministers of the 10 member states of the Arab League's committee for economic unity unanimously decided to hold their next meeting in Baghdad from June 6 to 7, 2001, Iraqi Trade Minister Mohammed Mahdi Saleh told AFP.

A League official who asked not to be identified said the decision "reflects the solidarity of the member states with Iraq." Egypt, Iraq, Jordan, Libya, Mauritania, the Palestinian Authority, Somalia, Sudan, Syria and Yemen are the 10 members of the committee. The Arab League has a total of 22 member states.

Iraq, meanwhile, persuaded Egypt and Libya to agree in principle to announce a free trade zone between the three countries.

Saleh said Iraq wants the prime ministers of the three countries to sign such an agreement.

Palestinians court international support

Palestinian President Yasser Arafat meets European Union envoy Miguel Angel Moratinos on Thursday to court diplomatic backing for peace and the Palestinian cause in the Middle East.

A senior Palestinian minister, meanwhile, said a US-led international committee of inquiry would get total freedom from the Palestinian side to investigate a 10-week wave of Israeli aggressions in which almost 280 Palestinians have died.

"They will have from our side total freedom to move and investigate," Planning and International Cooperation Minister Nabil Shaath told Reuters. "...we will respond to their questions, let them interview people and to see how the Israeli aggression started." A Palestinian official said Arafat and the EU envoy would discuss European support for the rights of Palestinians and a European role in halting what he called the Israeli assault.

Shaath said that if Israel really allowed the committee of inquiry to work and abided by its recommendations, this might open the way to further steps that would lead to the resumption of the peace process.

Oil finds its feet after $4 crash

Oil prices recovered some poise on Wednesday after the three-day crash that has capsized crude's two-year bull run and eased fears of a fuel crisis in the West this winter.

London Brent gained 46 cents to $28.25 a barrel after a $4 fall since last Thursday.

US light crude added 57 cents to $30.10 a barrel after dipping on Tuesday below $30 for the first time since early August.

"This is only a rebound. It does look for the moment as if the bull run is totally over," said broker Christopher Bellew of Prudential Bache.

"Oil seems to have broken the fundamental uptrend," said analyst Steve Turner at Commerzbank.

Tuesday's steep decline was triggered by news that the United Nations had presented Iraq a compromise proposal to try and end a deadlock over oil sales prices that kept Baghdad's crude exports suspended for a sixth day on Wednesday.

The latest industry data on key heating oil and gasoline inventory in the United States allayed concerns over winter heating fuel supply problems.

Syria to end 40 year rule over banking sector

President Bashar Al-Assad approved sweeping economic reforms for Syria on Saturday, including the establishment of private banks to end nearly 40 years of government monopoly of the banking sector.

Government officials told Reuters the approval came during a meeting of the Regional Command (RC) of the Baath Party headed by Assad which also approved issuing a law on banking privacy and the establishment of a stock market.

Officials said the meeting directed the appropriate authorities to discuss amending foreign currency exchange laws so the Syrian pound's price would reflect the free market rate.

Economic sources said these were part of economic reforms promised by Assad when he took office on July 17 following the death of his father, President Hafez Al-Assad, on June 10.

The younger Assad, a 35-year-old British-educated eye doctor and army officer interested in computer science, has adopted several economic and political reform measures during the last three months.

Syria to return all Lebanese detainees soon

All Lebanese held in Syria, many allegedly without trial or charges, will be released to the Beirut authorities soon, in a long-awaited move agreed by the two country's presidents, the Lebanese presidency said Wednesday.

The move to settle a delicate issue which had remained in the dark for years came after a telephone conversation early Wednesday between Lebanese President Emile Lahoud and his Syrian counterpart Bashar Al-Assad, a statement said.

Saddam discusses oil deal with top aides

Iraq's President Saddam Hussein discussed on Wednesday with his top aides a UN Security Council's resolution which renewed the country's oil-for-food deal for another six months but no decision was taken, the Iraqi News Agency (INA) reported.

It said Saddam discussed with senior ruling Baath party members and Revolutionary Command Council "the recent Security Council's resolution which extended the oil-for-food programme for the ninth phase and it was agreed to hold further discussions on the subject later on." The agency did not say, however, when exactly the discussions would be resumed.

Lebanese team fly to Baghdad for more trade

A Lebanese ministerial delegation flies to Baghdad on Thursday to discuss trade and oil-related issues, Information Minister Ghazi al-Aridi said.

He said sending the delegation, which includes the ministers of finance and economy, was in line with a policy of increasing commercial ties with Iraq.

Beirut-based Trans Mediterranean Airways, which has already flown several times to Baghdad in defiance of U.N. sanctions, said the delegation would travel aboard one of its planes carrying 10 tonnes of humanitarian aid.

Egypt privatises nine more firms, eight hotels

Egypt has sold nine companies and eight hotels to strategic investors for a total of 800 million Egyptian pounds ($208 million) as part of a broad privatisation programme, the minister of public enterprise said on Wednesday.

Mokhtar Khattab told reporters that two of the firms, namely food group Bisco Misr and Kafr el-Zayat Pesticides and Chemicals , had already been partially privatised and the government had now sold its remaining stake.

According to stock market statistics, the state had previously sold 55 per cent of Bisco Misr and 75 per cent of Kafr el-Zayat.

The minister listed the nine companies as: Arab Carpets and Upholstery; Egyptian Gypsum; National Metal Industries; Arab Foundation/FIBRO; Abu Zaabal Fertilisers and Chemical Products; Bisco Misr; Kafr el-Zayat Pesticides and Chemicals; Sornaga for Ceramics; Damietta Spinning and Weaving.

He did not give a full list of the privatised hotels, but said they included the Kalabsha and Amun in Aswan as well as six Nile cruise ships.

Saudi STC

The Saudi Telecommunications Co (STC) and SBC Communications Inc have ended a strategic partnership agreement, which would have offered the US firm a 20-40 per cent stake in the Saudi company's $12 billion capital, an STC official said on Wednesday.

Saudi feedbacks oil firms on energy projects

Saudi Arabia has given major oil companies feedback on their proposals for the kingdom's multi-billion dollar energy opening, industry sources said on Monday .

"The Saudi negotiating team has informed all the oil companies on where they stand," said an industry source.

"Everyone received an information pack on Sunday from the Saudis which they are now digesting." Saudi Arabia, the world's biggest oil producer, unveiled a rare, $100 billion energy sector opening to foreign oil firms two years ago.

A select group of 11 oil and gas companies submitted their final proposals for upstream gas and downstream oil projects at the end of August.

Libya finds gas field of 472b cubic feet

Libyan National Oil Corporation said on Monday its Syrte oil and Gas unit had made a gas find with a reserve of around 472 billion cubic feet, Libyan news agency Jana reported on Monday.

"The new gas discovery was made northwest of El Sumud gas field which lies about 90 km (56 miles) south of al Brigua town," NOC was quoted by Jana as saying.

"The new gas find reserve was estimated at 472 billion cubic feet, of which about 293 billion cubic feet of gas are recoverable," Jana added, quoting NOC.

Morocco says has no plans to devalue the dirham

Morocco will not devalue its national currency the dirham, despite a continuing appreciation against the euro, the official MAP news agency said on Saturday.

One euro was last exchanged against 9.5628/9.6202 dirhams, Bank al-Maghrib (central bank) figures showed.

Lebanon applies unorthodox economic policy

A textbook solution to Lebanon's recession and high debt level would be to reduce the budget deficit, lower the 14 per cent interest rate and economic growth should follow, financial analysts say.

But the government of businessman Rafik Al-Hariri, which took office last month, effectively argued from the start that textbooks do not apply in Lebanon.

Hariri said it was politically impossible to reduce the deficit, which stands at 15 per cent of gross domestic product.

Most public spending goes in paying the wages of public employees hired according to sects and in servicing debt.

The government is counting on local banks to continue financing the national debt and on cutting import duties to achieve a three to five per cent growth next year after none in 2000 an over-ambitious figure, say analysts.

Maroc Telecom

Morocco could be forced to delay the planned privatisation early next year of telecommunications giant Maroc Telecom due to a lack of bidders, press reports said on Friday.

The Moroccan government two months ago launched an international tender for the sale of a 35-per cent state in Maroc Telecom worth 20 billion dirhams ($1.82 billion). The closing date was set for December 20.