Mar 12 -
OPEC set to cut output
OPEC ministers began gathering in Vienna on
Thursday, set for fierce debate on by just how much they should reduce
A cut in output is almost inevitable, with the
11-nation cartel virtually unanimous in its wish to boost the price of
The size of the reduction is likely to cause
intense discussion however, with members pushing for between 500,000
barrels per day and 1.5 million barrels per day to be lopped off
On Thursday the benchmark Brent crude contract for
May delivery traded up 28 cents at $25.12 on London's International
Petroleum Exchange. OPEC's goal is to keep the price of a basket of
crudes between $22 and $28 per barrel.
The cartel fears that production increases it
pushed through last year will lead to a glut of oil as world economic
growth slows in 2001, reducing demand for crude.
OPEC President and Algerian Energy and Mining
Minister Chakib Khelil told Reuters on Thursday that a 1.5 million
barrel cut would be the top of the range, though other delegates told
the news agency the cartel would probably settle on a figure between
700,000 and 1 million.
There have been a number of significant downward
forecasts of expected oil demand — this week the International
Energy Agency tweaked its forecast, having performed a similar
downward revision earlier this year. Gloomier expectations for the
United States, the world's largest economy, have been behind the
OPEC chopped 1.5 million bpd in January, reflecting
the unprecedented volatility in crude prices over the past two years.
The cartel, which produces some 40 per cent of the world's oil, spent
much of 2000 jacking up production to take the steam off prices which
rose to 10-year highs above $35. Some two years ago the price slumped
as low as $10 per barrel.
Under its production agreement, OPEC produces some
25.2 million barrels of oil per day, though Iraqi exports are not
included because they are sold under the United Nations sanctions
Russia, Iran sign Nuclear co-operation pact
Russia defied the United States on Monday and
signed a series of agreements cementing military and nuclear
co-operation with Iran during the first Russian-Iranian summit in more
than a decade.
But President Vladimir Putin and his Iranian
counterpart, Mohammad Khatami, failed to resolve a long-standing
dispute over rights to oil riches under the Caspian Sea.
Putin defended a controversial decision to scrap an
agreement with the United States barring arms sales to Iran, saying
Tehran had a right to defend itself.
He also announced that Russia was prepared to
expand co-operation on atomic energy with Iran, speeding up
construction of the controversial Bushehr nuclear reactor that
Washington fears will help Tehran develop nuclear weapons.
"Iran does not intend to arm itself with
weapons which lie outside the boundaries of international agreements,
by which Russia abides, and Russia does not intend to break its
obligations," Putin said, referring to weapons of mass
"Russia is interested in cooperating (with
Iran) for economic reasons," said Putin. "As for politics,
Iran must be a self-sufficient, independent state which can defend its
Khatami for his part noted that Russia and Iran
both had the right "to decide what is in our benefit and what is
Russia provoked US fury and threats of economic
sanctions in November when it ripped up a secret 1995 pact with the
United States outlawing military co-operation with Iran.
The co-operation treaty signed on Monday commits
Russia and Iran not to use force or the threat of force against each
other, and to prevent either country being used to harbour
"aggression, subversive or separatist acts against the
Russia has been heavily criticized by the United
States for building the Bushehr nuclear reactor, which was
commissioned in 1994 and is still under construction.
Foreign investment law
Kuwait's elected parliament on Tuesday approved a
draft bill for direct foreign investment, granting incentives as part
of long-promised reforms to liberaliseand jump start a slow
The parliament of the OPEC member state approved
the 22- article law after a line-by-line debate over the past few
It is due to hold a second and final vote on the
law in two weeks.
During the debates some MPs blasted the
government-backed law that is designed to encourage foreign funds to
come to the Gulf Arab state, itself a major global investor and a key
Kuwait, with about $80 billion invested abroad and
in some of the world's largest firms, has made over $6 billion in
budget surpluses over the past 21 months due to a rise in oil prices.
But the economy has been slow and the local bourse
dropped in January to a five-year low mainly due to a confidence
crisis and lack of movement on the promised reforms.
Foot-and-mouth disease spreads to Middle East
The outbreak of foot-and-mouth disease that has
rocked Europe spread to the Middle East on Wednesday, as Saudi Arabia
and the United Arab Emirates reported finding 10 cases.
The cases were the first found in the Gulf states,
which import most of their meat. UAE Agriculture and Fisheries
Minister Saeed Al-Ragabani said eight imported cows were found to have
the disease, and the official Saudi Press Agency said two calves had
been diagnosed with the highly contagious disease in neighbouring
Saudi Arabia. It was not yet clear where the imported cows had
Countries around the world stepped up efforts to
stay free of the disease on Wednesday, banning meat and grain imports
from the European Union and increasing checks on travellers from
UAE Agriculture and Fisheries Minister Saeed Al-Ragabani
said eight imported cows were found to have foot-and-mouth, the daily
Al-Khaleej reported. Livestock imports now require prior approval, he
The Saudi Press Agency said Saudi Arabia had
extended a ban on imports of beef and mutton products from Lebanon and
Turkey to India, Iran and Taiwan.
Arabs call for protection force
Arab foreign ministers renewed an appeal on Monday
for an international protection force for the Palestinians and warned
the US against moving its embassy from Tel Aviv to Al Quds.
The foreign ministers were meeting at Arab League
headquarters to prepare for an Arab summit in Amman on March 27, which
is expected to focus on the Palestinian uprising against Israel and
the crumbling UN sanctions on Iraq.
"Arab countries together address the United
Nations Security Council, asking it to meet immediately to study ways
to set up an international force to protect the Palestinian
people," the Arab League said in a statement.
"Arab ministers have (also) decided to make
direct contact with the United States, Russia and the European Union,
to ask them to take a stand against Israeli measures, especially the
blockade of the territories," it added.
Iraq's oil surcharge gambit a quiet success
Three months on, Iraqi efforts to recapture direct
control over oil export revenues through an illegal surcharge appear
to have met some success, oil dealers and Iraqi experts say. The
victory may be as much political as fiscal.
Despite the loss of many of its best customers as
direct clients, and condemnation by the United Nations that controls
oil sales under 10-year-old sanctions, Baghdad has persevered.
A host of little-known companies have emerged to
facilitate the sale of the oil at a time when the rest of the
Organisation of the Petroleum Exporting Countries is turning down its
With persistence and patience, Baghdad has managed
to turn a sanctions-busting surcharge into a quietly accepted — if
not welcome — aspect of buying Iraqi oil.
Saudi April oil sales to western, Asian customers
Saudi Arabia has kept crude supply to its major
western and Asian customers unchanged for April, leaving customers to
speculate on Saudi export policy ahead of Friday's OPEC meeting.
With the Organization of the Petroleum Exporting
Countries widely expected to agree another 500,000 to one million
barrel per day export cut, most buyers had expected to be informed of
a reduction in monthly supplies from state company Saudi Aramco.
We're intrigued. Where are the cuts going to come
from? said a trader at one oil major. With the Saudi nominations in
April, we were hoping to get a glint of what OPEC was planning.
The allocations are the same as last month so we
really don't know what they are up to, said another major buyer. Last
time they made cuts, we got a hint of it when Saudi gave us less
volumes in February.
Qatar signs gas project
Qatar and the United Arab Emirates signed an
agreement Wednesday for the pioneer Dolphin gas venture to deliver
Qatari natural gas at a cost of four billion dollars, Qatar's energy
Abdullah bin Hamed Al-Attiya told reporters that
the "term sheet" agreement sets out all the terms and
conditions of the project, but he refused to divulge the price of the
IDB says $70 mln agreed for Palestinians
Two Arab funds have approved $60 million in aid to
the Palestinian Authority, of which $15 million has already been paid,
the Islamic Development Bank (IDB) said on Wednesday.
An IDB statement quoted the bank's President Ahmed
Mohammed Ali as saying the two funds, set up at an Arab summit held in
Cairo last year, had also approved another $10 million grant for the
Palestinian Health Ministry.
The funds had earlier allocated $53 million for
projects to support the Palestinian uprising against Israeli
The projects included rehabilitation of hospitals
and clinics, rebuilding damaged houses and support for small
industrial and agricultural projects in Palestinian areas.
STC signs $667 mln
The Saudi Telecommunications Co (STC) has signed a
2.5 billion riyal ($667 million) loan with regional banks to help
finance its expansion, bankers said on Sunday.
They said four banks that were mandated in December
to arrange the four-year loan completed the syndication in late
January and later signed the loan with STC.
The mandated banks are Arab National Bank, Riyad
Bank, Saudi British Bank and Arab Bank. The other banks that joined
the syndication are Citibank, al-Jazira Bank, National Bank of
Bahrain, the Saudi Investment Bank, Saudi Hollandi Bank and the Arab
Gulf Petrochemical Industries Company (GPIC) said
on Monday its net profit jumped more than four fold to $40 million in
2000 from $9 million a year earlier.
Syria expected to get UN council seat 2002
Syria has received the endorsement of Asian and
Arab nations for a rotating seat on the prestigious 15-member UN
Security Council next year, to the consternation of Israel.
Unlike the controversy over the Sudan last year,
the United States, should it want to do so, probably will not be able
to stop Syria's election by the 189-member UN General Assembly in
October, diplomats said.
In the case of the Sudan, Washington was able to
push the candidacy of Mauritius as the African candidate, in part
because African nations split their vote.
Damascus, Tehran train link opens
The train inaugurating the Damascus-Tehran rail
link left the al-Qadam station in the Syrian capital on Saturday,
station sources said.
The train stopped in the northern Syrian city of
Aleppo before heading to Tehran via Turkey, a source in the Aleppo
station said, without giving the number of passengers on board. The
weekly train link is 2350 kilometre-long and lasts 60 hours, at a cost
of 35 dollars.
"It's a good price. The Syrian rail won't make
any profit, but the aim is to promote relations between Syria, Turkey
and Iran", an Aleppo station official said.
Qatar sees oil output cut
Qatar's Energy Minister Abdullah bin Hamad al-Attiya
said he expects OPEC to decide on an output cut next week to make up
for oversupply on the world market, in an interview published on
"There is an excess of oil on the market that
varies between two and three million barrels per day (bpd)," he
told the London-based Arabic newspaper Al-Hayat.
"The average price for last month was less
than $24 a barrels, and the cut in production aims to stabilize the
market and prices while controlling supplies," said Attiya.