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Mar 26 - Apr 01, 2001

Gulf states finalize power grid plan

Ministers of electricity, industry and water from the Gulf Cooperation Council states have finalized a plan to set up a multi-billion dollar power grid to link all the member states, it was reported.

With the implementation of the project, the Gulf states could save $2.6 billion in power generation cost in the first phase only, Jameel Al-Hujeilan the Secretary General of the GCC said after the ministers' meeting.

He also called on the gulf governments to map out a comprehensive power and water strategy to cope with the increasing demand. The GCC Power Grid Authority will also be responsible for arranging finance for the project from various sources including loan syndications.

Saudi Minister of Electricity and Industry Dr. Hashim Abdullah Yamani was authorized to propose changes in the final agreement of the power grid project and to follow up the setting of the power grid authority.

The authority to be based in Dammam, Saudi Arabia, will comprise representatives from all the GCC member states.

Kuwait has reportedly agreed to bear the 30 per cent cost of the $5.2 billion project.

The power grid idea was approved during the 1977 GCC summit. The move is being regarded as significant in view of the surging electricity consumption in the region. Saudi Arabia alone needs some SR140 billion investment in power projects by the year 2020 to cope with the surging power needs.

The first phase of the power grid project would link Saudi Arabia, Kuwait, Bahrain and the Qatar. The United Arab Emirates and the Oman will be linked in the second phase of the project. Hujeilan said the cost of linking the Gulf states by a single GCC power grid will be lower than the cost component involved in setting up new power stations. It will also ensure regular power supply to industries in the region boosting productivity.

Oil up on technical buying

Oil prices perked up on Friday, boosted by technical buying in the absence of any fresh news. A barrel of benchmark Brent North Sea crude for May delivery rose to 25.05 dollars a barrel , from 24.63 dollars at Thursday's close.

In New York, the light sweet crude May contract fell 26 cents overnight to 26.54 dollars.

The Opec basket price of seven crudes worldwide rose to 22.85 dollars on Thursday from 22.76 on Wednesday, the Opec news agency (OPECNA) reported.

The Organization of Petroleum Exporting Countries (Opec) is targeting an average basket price of 25 dollars, within its range of 22-28 dollars.

The Opec cut production by four per cent last Saturday in a bid to prop up prices, but the effects so far have been muted.

Traders said, however, that the market was concerned about the basket price falling below the floor of Opec's target band in case the group decides to squeeze production again.

"I still think we are underpinned by the Opec range of 22 to 28 dollars," ABN Amro trader Richard Bend said.

The oil market has been one of the few markets to have remained reasonably stable this week.

An analyst at the GNI brokerage, Lawrence Eagles, said: "Overall, while the oil market can not afford to totally afford to ignore the demand side, this week it has been supply issues that have dominated on both crude and gasoline.

UAE adopts budget with $610 mln deficit for 2001

The oil-rich United Arab Emirates (UAE) government adopted a federal budget for 2001 with a deficit of 609.8 million dollars, the official WAM news agency reported Monday.

The budget forecasts spending of 6.17 billion dollars against revenue of 5.56 billion dollars for the federation, WAM said.

The budget for 2000 had a deficit of 664 million dollars.

Oil accounts for more than two-thirds of revenues of the UAE, whose OPEC output from February 1 will be 2.201 million barrels per day.

The forecast deficit comes despite the fact that gross domestic product (GDP) in the UAE grew 14 per cent in 2000 on the back of increased oil prices, according to an Emirates Industrial Bank report published earlier in January.

According to the report, GDP reached 59.1 billion dollars in 2000, up from 47.4 billion dollars in 1999.

Arab states change course of pipeline project

Arab states have slashed the projected cost of a regional gas pipeline by doing away with its main underwater section, Lebanon's Energy Minister Mohammad Baydoun said on Wednesday.

Baydoun said the liquefied natural gas pipeline would now run mostly inland from an area near Arish in the Sinai peninsula to Aqaba in Jordan, then to Lebanon and Turkey through Syria, which is self-sufficient in energy.

"Preliminary studies have shown that a land line is possible. It would be a bit longer, but less costly," Baydoun told Reuters, adding that the cost of the whole 850 km (528 mile) line would fall to $650-$700 million from $1 billion.

Egypt, Jordan, Syria and Lebanon signed an agreement in January to transport LNG From Arish to the Lebanese port of Tripoli through the Mediterranean, then distribute it to Jordan and Turkey through Syria.

Iran bans opposition party

Iran's conservative-run courts closed down the main opposition party on Sunday, less than three months before voters go to the polls for one of the most important elections in the nation's history.

They also banned four more publications close to the reform movement of embattled President Mohammad Khatami, whose silence over whether he will run for office has sparked widespread speculation about the June 8 vote.

Iran's revolutionary tribunal said the Iran Freedom Movement (IFM), which has been tolerated despite an official ban in place since 1988, was now in effect closed down because members wanted to overthrow the government

Riyadh may levy tax on expatriates' income

Saudi Arabia is considering levying income tax on workers from foreign countries. "The tax is currently being discussed by the Supreme Economic Council, which will take decision on the issue", Saudi Minister of Finance and National Security Dr Ibrahim Al-Assaf was quoted on Wednesday by the press as saying, when asked about the government's move.

He said the council had suggested some changes in income tax rates.

The minister also said that Saudi Arabia intended to set up a full-fledged stock market. A proposal in this regard had already been sent to the council for evaluation and decision, he added.

A new law on insurance companies was now with the Council of Ministers for endorsement. If approved, ban on foreign investment in the insurance sector would be lifted, he added.

The minister further said that efforts were being made to establish an Arab free trade zone by 2004 instead of 2007. He also announced that Saudi Arabia had contributed over SR2 billion to the Intifada fund that was set up by the Arab states.

Israel bombs Arafat's base

The Israeli army bombarded a training base for Palestinian leader Yasser Arafat's bodyguards late on Wednesday, killing an official and seriously wounding two others, Palestinian sources said.

Israeli tanks fired four shells at a training base of a special unit near the flashpoint Jewish settlement of Netzarim south of Gaza City, the Palestinians said.

Israel has frequently accused Arafat's bodyguards of involvement in anti-Israeli attacks. On Friday, Israel announced it had arrested three members of the Force 17 unit for attacks in which eight Israelis were killed and 20 more injured.

Sharjah offers 100% ownership to investors

Leader of the Sharjah Airport International Free Zone (SAIF Zone) Sheikh Saqer Al Qassimi has invited the local entrepreneurs to invest in the SAIF Zone, which offers 100 per cent foreign ownership and repatriation of funds with no currency restrictions.

He said the absence of corporate and personal income taxes, no import/export duties, coupled with attractive and long term land, office/warehouse lease rates have been other contributory factors, which attract foreign investors.

Addressing a seminar "Investment Opportunities in SAIF Zone, Sharjah", he said the recent decree by the Sharjah Executive Council, authorizes local free zones to conclude leases of 25 years duration, renewable to a similar period and to facilitate the establishment of companies, with limited liabilities.

Arabs seek panel to reconcile Iraq with Kuwait, Saudi

Some Arab countries have proposed the creation at next week's Arab summit of a committee to reconcile Iraq with its neighbours, Kuwait and Saudi Arabia, Iraqi Foreign Minister Mohammad Said Al-Sahhaf said in statements published Thursday.

"The idea was suggested by a limited number of Arab (foreign) ministers, who met last week in Cairo, and calls for the creation at the Arab summit of a reconciliation committee headed by Jordan's King Abdullah II," Sahhaf said.

The proposed committee would draft "a solution to the pending problems between Iraq, Saudi Arabia and Kuwait," Sahhaf told Jordanian newspape editors without saying who was behind the initiative.

Iraq's proven oil reserves go up

Iraq has increased its proven oil reserves by three billion barrels to 115 billion barrels despite the crippling embargo imposed on it after its 1990 invasion of Kuwait, newspapers reported Tuesday.

"Iraq has succeeded during its years of sanctions in increasing oil reserves by three billion barrels to 115 billion barrels," oil ministry undersecretary Taha Hammud told the weekly Al-Rafidain paper.

"The oil ministry has drawn up an ambitious plan to continue oil exploration throughout Iraq," he said. "Once the necessary equipment is available, exploration will focus at first in the western desert region" bordering Saudi Arabia.

Egypt reports two oil finds in Gulf of Suez

Egypt's Gulf of Suez Oil Company (Gapco) and BP Amoco have made two new oil finds in the Gulf of Suez with combined proven reserves so far of 35.5 million barrels, an oil ministry official said on Thursday.

She said the first has a capacity of 10,000 barrels per day and proven reserves of 29 million barrels, which could double.

The second has a capacity of 3,000 barrels per day and proven reserves of 6.5 million barrels, which could rise to 14 million.

"Egypt's total proven reserves of oil at 1 January, 2001 were 412 million tonnes," the official said.

Saudi, Qatar end border dispute

Saudi Arabia and Qatar signed a border agreement on Wednesday ending a long-standing dispute which a decade ago led to armed clashes between the two oil-rich Gulf Arab states.

The pact was signed in the Qatari capital Doha by Saudi Foreign Minister Prince Saud Al-Faisal and his Qatari counterpart Sheikh Hamad bin Jabr Al-Thani.

Jordan, UAE to build troop carriers

Jordan and the United Arab Emirates (UAE) are to build troop carriers in a joint investment worth between 25 and 40 million dollars, officials from the two countries announced Tuesday.

Prince Faisal bin Hussein, brother of Jordan's late king Hussein, at an Abu Dhabi arms fair that 1,500 of the tactical, 4x4 vehicles would be rolled out in the first two to three years.

IDB says $92 mln agreed for Palestinian

Arab states have approved another $92 million dollars in aid to the Palestinian Authority, almost bankrupted by Israel's closure of the West Bank and Gaza Strip, the Islamic Development Bank (IDB) said on Tuesday.

Arab officials agreed to the new funding at a meeting on Monday night in the Saudi city of Jeddah, the bank said in a statement sent to Reuters.

Syria approves law on banking secrecy

Syria's parliament has approved a law on banking secrecy that paves the way for the establishment of private banks after four decades of socialist-inspired state control, officials said on Monday.

Passage of the law on Sunday night was the latest step forward in rapid economic, political and administrative reforms introduced by western-educated President Bashar Al-Assad who took power last year.

While establishing banking secrecy, the law prohibited all forms of dubious financial operations, Economy Minister Mohammed Imadi told parliament. It included measures to prevent banking secrecy from being abused for money laundering purposes, he said.