May 21 -
Jun 03, 2001
Saudi awards multi-billion dollar gas projects
Saudi Arabia on Friday declared eight leading
energy companies winners in the race for a stake in its multi-billion
dollar gas development initiative, the kingdom's biggest opening to
foreign investors for 25 years.
Supermajors ExxonMobil and Royal/Dutch Shell won
starring roles in three projects that are estimated to require
combined initial investment of $25 billion.
Saudi Foreign Minister Prince Saud Al-Faisal said
Exxon, Shell, BP and Phillips were given stakes in the biggest of the
projects on offer, the $15 billion development in South Ghawar, known
as core venture one, the Saudi Press Agency (SPA) announced.
Exxon also secured the leading role in core venture
two, on the Red Sea coast, with Enron and Occidental taking smaller
Shell, TotalFinaElf and Conoco won stakes in core
venture three, for development of gas at Shaybah in the empty quarter
of southeast Saudi Arabia.
Hard negotiations will now start to finalise full
contracts by a year-end target, said Exxon Mobil chief executive Lee
"I think people need to understand that there
are some tough issues given the immensity of the projects. There are
so many potential interfaces with the Saudi economy that there will be
some tough decisions," Raymond said in an interview with Reuters.
The awards mark the biggest advance in the kingdom's efforts to
develop its gas reserves, the world's fourth largest, since Riyadh
unveiled the energy opening more than two years ago.
Eleven companies since have competed furiously for
the opportunity to invest in the world's leading energy producer — a
country that had forbidden upstream investment since nationalisation
With Kuwait about to open its doors to foreign
investors Mexico is left as the last bastion of energy nationalisation.
OPEC seeks $28 target
OPEC has no interest in the basket price of its
crude rising above $28 a barrel, the organization's chief said in an
interview on Wednesday.
OPEC Secretary-General Ali Rodriguez Araque told
the online edition of the Financial Times in an interview that Opec
would "act as necessary to maintain stability."
In an attempt to damp down concern about a surge in
oil prices in the fourth quarter, Rodriguez said the oil producers
would keep average prices for the seven-crude OPEC basket in the $22
to $28 a barrel range.
He said he believed there was a consensus among
members to maintain the current production ceiling of 24.2 million
barrels a day when they meet in Vienna early next month.
The average price of the OPEC basket last week was
$26.05 a barrel and stands at $24.58 for the year to date, the report
The ceiling excluded Iraqi exports, which are
controlled by United Nations sanctions.
Commenting on the plans of President George W.
Bush, unveiled last week, to boost domestic oil production, Rodriguez
said a U.S. policy of reducing import dependence was more realistic
than those of the Nixon administration in the mid-1970s, which
proposed to eliminate imports.
Some oil market analysts argue that OPEC needs to
raise output from July to pre-empt a tightening of supplies and
prevent prices spiraling towards the end of the year.
But Rodriguez said the organization had the ability
to bring spare capacity onstream when needed to maintain market
Global oil demand — at 76.7million barrels a day
in the first quarter — is rising at a slower rate than forecast and
non-OPEC production is set to increase.
Qatar poised to dominate Gulf gas supply
Gas-rich Qatar is poised to become the leading
exporter to its Gulf neighbours faced with shrinking supplies.
"We have gas for everybody in the world who
wants it," said a Qatari official.
Demand in the Gulf region has been rising at 6.5
per cent a year and some states are already starting to feel pinched,
Nasser Jaidah, director of Oil and Gas ventures at Qatar Petroleum,
said at a recent gas conference.
But Qatar is ready to spring to their rescue with
the world's third largest reserves after Russia and Iran.
Its North Field is the biggest concentration of
non-associated natural gas with more than 500 trillion cubic feet (tcf)
of deposits. "The current year is the last year of surplus gas
supply in the Gulf Cooperation Council (GCC) states," Jaidah
By 2005, the overall deficit in the GCC —
grouping Saudi Arabia, Kuwait, Bahrain, the UAE, Oman and Qatar —
will rise to 4.5 billion cubic feet per day (cfd) and in 2010 to six
billion cfd, he said.
Iraq renews trade warning over proposed sanctions
Iraq said on Thursday it would severe all trade
ties, including oil sales, with any country that implemented a
proposed new British-US sanctions plan against Baghdad.
Britain and the United States are trying to promote
a new system of "smart sanctions" that would ease
restrictions on imports of civilian goods while tightening controls on
the smuggling of weapons-related imports.
"If any country approves and implements the
new sanctions against Iraq, it is only natural that Iraq should react
by halting its trade relations including the sale of oil to that
country," Minister of State for Foreign Affairs Naji Sabri Ahmed
told Reuters Television.
"But we hope nearby countries will not apply
this, and we were told by them that they will not." Iraq, which
insists it will reject the new sanctions, said this week it would
suspend an oil-for-food programme and halt all oil exports if the
sanctions were adopted.
The oil-for-food programme puts proceeds from Iraqi
oil sales in a UN account and then pays suppliers of food, medicine
and many other goods.
New raid on Palestinian territory
Israeli tanks and a bulldozer staged a new raid
Thursday into Palestinian territory near a Jewish settlement in the
Gaza Strip, before withdrawing from most of the area, Palestinian
security officials said.
The raid in an area just south of Gaza City
occurred after the Israeli army said Palestinian militants fired
mortar bombs at the Netzarim settlement, but there were no casualties
Israeli tanks firing shells and one bulldozer
raided the Sheikh Ajleen neighbourhood, on the coast near the
settlement, to destroy vineyards and tear down a wall around a home,
security sources said.
Several hours later Israeli tanks remained at the
side of a road in the area, but were allowing traffic through.
General Abdel Razeq al-Majeida, head of Palestinian
general security in the Gaza Strip, also reported that Israeli
helicopters late Wednesday night had been flying over the southern,
eastern and northern outskirts of Gaza City.
Iran's Khatami campaigns under reform banner
Iran's election campaign geared up on Thursday
after an opening shot from clear favourite President Mohammed Khatami
saying reform was irresistible.
The diffident, mid-ranking cleric looked determined
and decisive as he fielded questions from students in a television
broadcast late on Wednesday, in contrast to a tearful address three
weeks ago when he declared he would run for re-election.
"Reform cannot be stopped because its roots
are in the will of the people," he told state television in his
opening comments of his re-election campaign.
Analysts dismiss Khatami's nine mostly conservative
challengers in the June 8 polls, but predict he could have trouble
mobilizing his own supporters because of disillusionment at the slow
pace of political, social and economic change.
A low turnout could hamper Khatami's mandate to
press on with reform against resistance from conservatives in the
judiciary and the 12-man Guardian Council which can veto laws.
Saudi crown prince declines US invitation
Saudi Crown Prince Abdullah Bin Abdul Aziz has
declined an invitation to visit the United States next month, news
reports carried by the press indicate. According to the US officials,
quoted, Crown prince Abdullah has declined the invitation because of
the perceived US inaction in the current Palestinian-Israel conflict.
The US officials are seeing the rebuff by the Saudi
Crown Prince as an indication of Arabs' displeasure with the Bush
administration's stance on the issue and the more distant approach to
Mubarak warns of economic neglect of Africa
Egyptian President Hosni Mubarak warned Tuesday or
the risks of "economic marginalisation" for Africa due to
globalisation, at the opening of a summit of the Common Market for
Eastern and Southern Africa (COMESA).
"The challenges of economic, commercial,
cultural and intellectual globalisation are multiplying," host
Mubarak said in his opening address to the COMESA summit in Cairo.
"They are challenges which bring the danger of
economic marginalisation, in particular with the abolition of
frontiers and the lifting of restrictions on the movement of products,
services and capital," he said.
Mubarak said COMESA should take advantage of
cooperation forums with global economic institutions and trade blocs
to "create an international economic order which will take into
consideration the interests of all parties." He also underlined
the need to attract capital, encourage direct foreign investment and
increase security in the conflict-ravaged COMESA region, which groups
21 countries and around 380 million inhabitants.
Egypt approves tax
The Egyptian parliament has given its approval for
new taxes to be imposed on wholesalers and retailers under the final
phases of a sales tax law despite opposition criticism, parliamentary
sources said on Tuesday.
"The People's Assembly approved a government
request to implement the last two stages of the tax law during a late
night session which was boycotted by about 54 legislators", they
Only industrial producers, service providers and
importers had been paying the tax in the first stage of the General
Sales Tax Law that started to come into force in 1991.
Under the newly passed stages of the law, which
come into effect as soon as they are signed by President Hosni Mubarak,
wholesalers and retailers whose annual turnover is at least 150,000
pounds ($39,000) will be liable to pay the tax.
Kuwait Airways could set up regional airline
Kuwait Airways (KAC) is studying a plan to form a
regional airline with private investors to serve costly short-range
destinations, a move designed to help cut repeated losses since the
devastation of the 1991 Gulf War.
Chairman of the national flag carrier Ahmad Al-Zibn
told Reuters in an interview on Tuesday that the move was among KAC
measures to cut costs in an effort to return to profitability.
The net loss over the last nine-month fiscal period
(July 2000-March 2001) was around 31 million dinars ($101 million) and
KAC is projecting a similar shortfall in the new fiscal year which
started April 1 2001. KAC suffers from heavy debt payments for a new
fleet after it lost 84 percent of its assets during the 1990-91 Gulf
Syrian trade minister in Baghdad
Syrian Economy and Foreign Trade Minister Mohammed
Imadi arrived in Baghdad late Monday aboard a direct flight from
Damascus for talks focusing on commercial issues.
Joined by officials from his ministry and those of
health and irrigation, Imadi will participate in a meeting of the two
countries' joint commission.
"We are going to work by all means to expand
cooperation between Iraq and Syria in various areas," the Syrian
minister told reporters at the airport.
Iraqi Trade Minister Mohamed Mahdi Saleh said the
joint commission would hold its first meeting on Tuesday,
concentrating on "cooperation in the economic, scientific and
Saudi king expands advisory council
Saudi Arabia on Thursday appointed an expanded
120-member consultative Shura council, the second expansion of the
country's only representative body since it was set up in 1993.
The official Saudi Press Agency (SPA) said the new
all-male council, which operates only as an advisory and not a
legislative body, starts a four-year term on Saturday. It replaces a
King Fahd on Thursday decreed the expansion of the
Shura Council — introduced among promises to bring about gradual
popular representation as part of long-awaited political and other