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Aug 20 - 26 , 2001

Kuwait predicts oil price collapse in long term

Kuwaiti Oil Minister Adel al-Subaih said on Wednesday the OPEC cartel would maintain its $25 per barrel target for as long as it could, but he predicted a price collapse in the long term.

The Organisation of the Petroleum Exporting Countries, which controls about two-thirds of world exports, was "feeling the pinch" from its self-imposed output cuts, he added, while other producers enjoyed the fruits of its sacrifice.

"We are the ones who feel the pinch and non-OPEC countries get the fruits of our policy," al-Subaih told reporters at a reception in London.

"In the long term I think there will be a big collapse in prices and everyone will have to reassess their position," he added.

OPEC has enjoyed its biggest oil boom for two decades since 1999, when it slashed production.

But while OPEC used the money to pay down fiscal deficits, multinational companies invested heavily in new production outside the cartel, and non-OPEC countries are expected to take for themselves all the global demand growth next year.

OPEC, meanwhile, maintains its target price band of $22-$28 per barrel with ever-deeper production cuts. The price of OPEC's basket of crudes was pegged at $25.01 a barrel on Tuesday.

"It is not easy to maintain prices in the band because non-OPEC production is increasing and non-commercial oil becomes attractive at that price," al-Subaih said.

The 10 OPEC members with quotas are now allowed to pump 24.2 million barrels per day (bpd), 11 per cent below the 27.3 million bpd they were pumping in 1998 before this series of cuts.

They are due to slash quotas for a third time this year, by 4 per cent or a million bpd, next month under an agreement made when prices slipped in July.

Iraq, OPEC's 11th member, is outside the quota system because its exports are restricted by United Nations sanctions.

Jordan looks for private investment for major water project

Jordan's water ministry launched Tuesday an international tender for a project aimed at developing the country's water resources, ranked in the world's bottom 10.

The ministry announced in the local press and on it web site a request for the private sector to join a project aimed at exploiting the underground water table in Disi (South) for a 40 year period under a Build-Operate-Transfer arrangement.

The project consists of pumping from 65 wells to Amman from Disi, 325 kilometres (200 miles) south of Amman, for an estimated 100 million cubic metres (3.5 billion cubic feet) of water.

The cost of the four-year project is estimated at 600 million dollars, of which 200 million will be carried by the Jordanian government.

Amman is still hoping for money promised by Libya one year ago for the Disi project.

In May, Jordan launched an appeal for international investment in the construction of the al-Wehda dam on the Yarmouk river along the country's border with Syria.

The dam will create a reservoir with a capacity of 220 million cubic meters (7.8 billion cubic feet), which will be equally shared by the two countries.

This largely desert kingdom annually needs about 1.1 billion cubic meters (38.8 billion cubic feet) of water, but the supply this year is forecast at only 850 million cubic meters (30 billion cubic feet). The Wihda and Disi projects are expected to provide the country with drinking water through 2020.

Yemen foreign debt down to $4.8 bln in March

Yemen's foreign debt reached 4.8 billion dollars (5.3 billion euros) at the end of March, down 2 per cent from december 2000, said a report from the central bank published Tuesday in Sanaa.

Yemen's internal debt fell by 39.5 from 997 million dollars in December to 604 million in June, the report said.

Meanwhile, inflation fell from 8.5 percent to 7.3 per cent over the same period.

However, budget surpluses for the first semester of 2001 reached 360 million dollars, against 474 million over the same period in 2000.

In May, President Ali Abdullah Saleh announced that economic reforms launched in 1995 had slashed foreign debt to three billion dollars.

Since 1995 the Yemeni government has been following a programme sponsored by the World Bank and the International Monetary Fund to lower subsidies and privatise state industries.

Over 110 die in Iran floods

Over 110 people have been killed and 35 others are still missing following torrential rains which sparked heavy flooding in northern Iran, IRNA reported on Sunday.

"According to initial estimates, floods in the northern Golestan province have left over 110 people dead and caused some 200 million rials ($25 million) in damages," said Habibzadeh Dabaq, the deputy Golestan governor, cited by IRNA.

He said some 1,500 houses, 100 cars and 80 kilometers of roads, as well as 15,000 hectares (37,000 acres) of farmland have been destroyed since the waters, sparked by heavy rainfall, swelled on Friday, flooding 17 villages in this province which lies east of the Caspian Sea.

Arab ministers meet Arafat over media image

Arab information ministers and Palestinian President Yasser Arafat on Wednesday agreed to spend over $1 million to improve the Palestinians' media image in their fight against Israeli occupation.

Arab League spokeswoman Hanan Ashrawi said all states would contribute to the fund, aimed at combating "media deception" relating to the Palestinian issue.

"The money is enough to fully implement these plans," Ashrawi, the League's Media Commissioner and a prominent Palestinian lawmaker, told reporters after the meeting.

"Israel is currently destroying the peace process and its foundations and is launching a war against the Palestinians," she said. According to a written summary, the plan aims to "persuade public opinion, especially in the United States, of the importance and necessity of immediate action to save the explosive situation".

Syrian PM in Iraq on first such visit in 20 years

Syrian Prime Minister Mohammad Mustapha Miro flew into Baghdad on Saturday, the official INA news agency said, in a new sign of warming relations between the two neighbours after a 20-year rift.

Miro, the first prime minister from Damascus to visit since ties were broken off in 1980, arrived at Saddam international airport aboard a Syrian aircraft accompanied by a delegation of businessmen.

He was due to attend a meeting of a joint Iraq-Syria commission and try to boost trade, which today stands at about 500 million dollars, an Iraqi official said.

"A cooperation agreement covering economic, trade and cultural areas will be signed during this visit," Miro told the INA agency.

He restated the Syrian position in calling for the lifting of the embargo against Iraq, believing that "it violates the principles of the UN and international law."

Iran: Gulf war cost us $23 bln in damages

The 1991 Gulf war cost Iran 23 billion dollars in damage, the deputy minister of agriculture Behzad Ghareh-Yazdi said Wednesday.

"The occupation of Kuwait by Iraq caused 23 million dollars in damage, including 15.4 billion in the sector of natural resources, agriculture and fishing", the official was quoted as saying by IRNA.

"A third of Iran's Persian Gulf waters were polluted by the fires set off by Iraq in 700 Kuwaiti oil wells and the explosion of platforms", he said.

He also mentioned the burden of the estimated one million refugees, both Kurds and Shiite Muslims, who fled to Iran when the war broke out.

The assessment of Gulf war damage was carried out by a team of government officials and academics and financed by the UN up to 17.7 million dollars.

Three Britons confess to bomb blasts

Three British men confessed on Saudi television Monday to responsibility for three bomb blasts in the kingdom between December 2000 and March 2001.

The three men, named as James Lee, James Cottle and Les Walker, gave detailed confessions with maps of three attacks, two in Riyadh and one in the eastern city of Khobar, that left two other Britons and an Egyptian injured.

They had "received orders" to carry out the attacks, the trio said without elaborating.

Lee, who said he worked at a military hospital in Riyadh, said he and Cottle had been recruited in November to carry out the blasts.

Cottle said he worked for a private construction firm while Walker worked for an investment company.

The three men confessed to the December 15 blast in Khobar that targeted British citizen David Brown, wounding him in the shoulder, throat and stomach.

Intifada grounds El Al profits

State-run national airline El Al Israel Airlines lost $83 million in the first half of the year, more than the $70 million the airline had predicted, the Ha'aretz daily reported on Thursday.

Ha'aretz said the poor second-quarter results stemmed mainly from a sharp drop in incoming passengers, due to the conflict.

It also said El Al recorded a 21 per cent fall in passenger traffic for the first half of the year.

Palestinians reciprocate embargo on Israeli farm goods

Palestinian Agriculture Minister Hikmat Zaid on Thursday announced an embargo on a list of agricultural products from Israel, in response to a 10-month blockade on Palestinian goods entering Israel.

"As of today, certain Israeli agricultural products will not enter Palestinian territory," the minister told reporters. "This measure aims to denounce the destruction of Palestinian agriculture by Israel through the Israeli blockade of Palestinian territories," he added.

"It will be lifted if the (Israeli) blockade is lifted, allowing the free circulation of agricultural products and Palestinian veterinaries through the Palestinian territories." He said restrictions on the movements of vets was leading to a rise in livestock diseases.

The Israel products to be banned included bananas, mangoes, melons, pears, apples, chickens and eggs, beef and dairy products, with the exception of milk.

Arab Financial Forum to be held in Cairo

Deliberations of the sixth Arab Financial Forum will begin in Cairo on September 11 to discuss opportunities and challenges that face the

Middle East and North Africa region, regional and international developments as well as issues relating to financial markets.

Participants will also discuss during the two-day forum a host of issues including trade, joint projects, financial markets, indebtedness, telecommunications, trade policies in light of globalization in addition to the future role of the Arab financial markets.

The forum will also be attended by experts in financial markets from 32 Arab and foreign countries as well as economic experts from international financial institutions.

Superbrands comes to the Middle East

Superbrands, the association that celebrates and supports the cause of quality branding throughout the world, recently set up its first middle-east office in Dubai.

A representative branch of its main office in the UK, the new office is set to go about promoting its activities and selecting members for its regional council, whose responsibility it will be to select the region's Superbrands.

ABB wins $93 mln contract in Algeria

Swiss-Swedish engineering group ABB said on Monday it has won a contract worth 93 million dollars (104.5 million euros) to design and build a gas compressor station in Algeria.

The station makes up part of a pipeline 1,400 kilometres (875 miles) long that runs from Algeria to Europe under the Straits of Gibraltar, a company press statement said.

The new compressor will boost the pipeline's capacity to 11 billion cubic meters per year from eight billion, ABB added.

The station, expected to be completed in 27 months, will be run by Algerian oil company Sonatrach.

BP signs $2.5 bln Algerian gas deal

The Algerian oil company Sonatrach and British Petroleum this weekend signed three contracts worth 2.5 billion dollars (2.8 billion euros) for the development of gas reserves in the Algerian desert, officials said on Sunday.

Other companies involved include Kellog-Brown and Root, JGC, Bechtel and Algerian drilling company ENAFOR.

When complete, the project is expected to yield nine billion cubic metres (315 billion cubic feet) of natural gas per year.

One contract is for a gas processing plant, pumping networks and infrastructures.

A second covers a 460-kilometre (275-mile) gas pipeline linking the largest Algerian gas field at Hassi R'mel to In Salah in the heart of the desert.

The third contract provides for the drilling of 71 production wells, the officials said. "The new quantities of Algerian gas available when this major project is implemented will confirm the role Algeria intends to continue playing on the international gas market and the energy market of the European and Mediterranean region," Algerian Energy Minister Chakib Khelil said.