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 5. TRADE  6. GULF



Nov 26 - Dec 02, 2001

Norway output cut boosts oil price

Both Mexico and Norway have pledged to help Opec Crude oil prices in London have leapt almost 7% higher, breaking back through the $20 per barrel mark.

The sudden surge came after Norway said it had agreed to mirror the behaviour of the Opec cartel by reducing supply in order to boost prices.

"The government has decided that if Opec and non-Opec countries carry out cuts, then I have got a mandate to carry out cuts of 100,000 to 200,000 barrels a day," Norwegian Oil Minister Einar Steensnaes said.

The news prompted renewed confidence that Opec will push through its own cuts which were agreed on the condition that Russia, Mexico and Norway followed suit.

Norway's decision to support Opec leaves Russia in the spotlight since Mexico has already made a firm commitment to reduce output.

Opec chief Ali Rodriguez has said that he was "very confident" that Russia would cut production.

"We are very confident of a rational decision by President Putin and the authorities in Russia," Mr Rodriguez said.

But analysts and the signals from Russia itself have been mixed so far.

Russian oil officials are meeting at the Kremlin on Friday in order to discuss a cut, but traders are sceptical of the country's ability to enforce quota discipline.

Oil prices hit a two and a half year low at the beginning of this week, slipping to $16.65 per barrel.

But renewed hopes of concerted action from Opec has seen prices touch $20.00 per barrel on Thursday.

Last year, the oil price soared to more than $30 a dollar, prompting widespread fuel protests in September after the strong crude oil price fed through to prices at the petrol pump.

Aramco to undertake joint venture in China

Saudi oil company Saudi Aramco, in strategic partnerships with Fujian Petrochemical Company Ltd (FPCL) and ExxonMobil, is working on a project to develop an integrated petroleum refining and petrochemical project in Quangang, in the Fujian province of China.

In this context an agreement was signed in Beijing on November 14 by Aramco Overseas Co. B.V., a Saudi Aramco subsidiary, with the Fujian Petrochemical Company Ltd (FPCL) and ExxonMobil.

China Petroleum and Petrochemical Co. Ltd to carry out a joint feasibility study (JFS) for the Fujian Integrated Petroleum/petrochemical project.

The JFS is a document through which the partners agree on and define the objectives and plans of a project.

After completion the study would be submitted to State Development Planning Commission (SDPC) of the People's Republic of China, a Saudi Aramco announcement said.

The joint venture will be formed after the Chinese government approves the joint venture contract and then the articles of association of the joint venture.

The submission of the JFS to the SDPC is being regarded as an important step in the development of the existing FPCL refinery in Quangang, Fujian Province of China.

FPCL is a joint venture between China Petroleum & Chemical Corp. (Sinopec) and the Fujian province. Abdulaziz F. Al-Khayyal, senior Vice President Saudi Aramco International Operations termed the signing of the JFS submission agreement as a key milestone in the development of the project and Saudi Aramco's strategic partnership in China. "The integrated petroleum refining and petrochemical project has strong and sound fundamentals and will contribute to the exceptional economic development in Fujian, in particular and China in general. We look forward to the Chinese government's acceptance and approval of the JFS," he was quoted as saying.

Saudi Aramco and ExxonMobil will each have 25 per cent stake in the proposed joint venture while the FPCL would have a 50 per cent stake in the company.

Saudi Arabia to sell shares in joint venture cos

The Saudi cabinet has authorized the General Investment Fund (GIF) to sell the state's shares in a number of joint venture companies, including the Saudi-Pakistani Industrial Development Company , to the local private sector. The cabinet asked Saudi Minister for Finance and National Economy, Dr Ibrahim Al-Assaf to make necessary arrangements for the proposed sale.

The cabinet also authorized the minister to hold discussions with the partner countries to make changes in bilateral agreements on joint venture companies and sign related documents in this regard.

The Saudi government has a 50-per cent stake in seven joint venture companies established with a number of countries, including Pakistan, Syria, Egypt, Morocco and Bangladesh.

Muslim states to form Islamic financial market

Four predominantly Muslim countries have signed an agreement to create an Islamic financial market, regulators in Malaysia said on Monday.

The Labuan Offshore Financial Services Authority says Malaysia, Bahrain, Indonesia and Sudan have agreed to set up a governing board for the new Islamic financial market. Brunei, another overwhelmingly Muslim nation, is expected to join.

"The board is expected to hold its inaugural meeting in January 2002 to establish a secretariat headed by a full-time chief executive officer," the authority said.

The four countries and the Islamic Development Bank signed the deal in Paris last Tuesday but have yet to finalize the operating structure. It is thought the market will aim to boost cooperation and trade between companies and banks in the member nations.

Amnesty: Israeli forces increasing use of torture

Amnesty International said Tuesday that Israeli security forces are increasingly using torture against Palestinian suspects despite a 1999 High Court ruling, which sought to stop the practice.

In a written submission to the UN Committee Against Torture, which began its regular examination of Israel on Tuesday, the human rights group said the Israeli government had failed to counter evidence of the increasing use of torture by law enforcement officials during interrogations.

Amnesty said that members of the Israeli security forces are benefiting from impunity for torture or ill-treatment of Palestinians.

Amnesty said it had strong evidence that methods such as sleep deprivation, painful handcuffing and forced positioning were being used again, mainly against Palestinians.

Jordan unveils new economic reforms programme

Jordan's Prime Minister Ali Abu Ragheb submitted a comprehensive programme of social and economic reforms to King Abdullah II Thursday, detailing multi-million-dollar projects to improve life in the kingdom.

Abu Ragheb's deputy in charge of economic affairs, Mohamed Halayka, estimated the cost of the projects at 300 million dinars (422 million dollars) and said they would focus on revamping health and education services as well as investment-tracking schemes.

Jordan hopes to raise the funds by 2002, outside the budget, from the alleviation of its seven-billion-dollar foreign debt, foreign aid and privatisation, officials said.

On October 25 Abdullah gave Abu Ragheb a three-week deadline to chart out a programme of reforms, insisting that the overall task should be aimed at reducing unemployment and poverty in Jordan.

Palestinian children killed in blast

Five Palestinian children have been killed in an explosion near a school in the southern Gaza Strip.

The blast, reportedly from an unexploded Israeli tank shell, happened close to an elementary school run by the United Nations in the Khan Younis refugee camp.

Palestinian security commander Colonel Khaled Abu Ola said the children were killed after stumbling over the shell, fired some time in the past two days.

Palestinian legislator Hannan Ashrawi called the deaths a "massacre", and an example of "systematic state terrorism".

AlBaraka merges with TII Kuwait

Dallah AlBaraka Group of Saudi Arabia and the International Investor Group of Kuwait have merged to create a pan-regional and full service Islamic financial services group called AlBaraka & The International Investor , said an announcement on Saturday.

The announcement issued by AlBaraka Islamic Bank, that belongs to Dallah AlBaraka Group, said the newly created group had assets in excess of $3 billion, capital of around $350 million, a network of over 100 branches and over 4,000 staff members in 12 countries across South Asia, Africa and Middle East.

Iran seeks curb on allied troops

Kamal Kharrazi and Jack Straw Iran has warned against the deployment of more foreign troops to Afghanistan, saying they would only complicate the crisis in the country.

In a meeting with his British counterpart Jack Straw in Tehran, Foreign Minister Kamal Kharrazi said that "handling Afghan issues should be left to the Afghan people".

US builds new Mid-East peace initiative

Israeli Prime Minister Ariel Sharon will meet US President George W Bush at the White House in December as America renews its efforts to revive Middle East peace talks.

A White House statement said they would discuss the international campaign against terrorism and the pursuit of peace in the Middle East.

The announcement follows a speech on Monday by Secretary of State Colin Powell, who promised greater US engagement in the region, starting with the appointment of two envoys.

Iraq oil exports surge to 18.6 million bbl

The volume of oil exported by Iraq under UN supervision surged last week from 10.9 million to 18.6 million barrels, the office administering the United Nations oil-for-food programme said Tuesday.

In the week ending November 17, there were six loadings at Iraq's gulf port of Mina al-Bakr and five at the Turkish Mediterranean port of Ceyhan, the only export outlets authorised under sanctions imposed on Iraq after it invaded Kuwait in August 1990.

The average price of Iraqi crude during the week was about 15.65 dollars (17.70 euros) a barrel and revenue was estimated at 290 million dollars (330 million euros), the office said.

Abu Dhabi in joint venture

Abu Dhabi has formed a joint venture company with a US-British consortium to manage a new water and power plant to be built next year in the emirate, government officials said Tuesday.

Shuweihat CMS International Power will be 60 per cent owned by Abu Dhabi Water and Electricity Authority (ADWEA), while the remaining 40 per cent will be split equally by British energy group International Power and US company CMS Energy, the officials said.

The new company, which has been capitalized at 675 million dirhams (184 million dollars), will operate and maintain power and desalination operations at the Shuweihat plant for 20 years.

UAE banks

The UAE central bank ordered commercial banks Monday to freeze the assets of 30 companies as part of a clampdown on financial irregularities in the country following the US terror attacks in September.

The central bank asked all 47 national and foreign banks operating in the United Arab Emirates (UAE) to "provide the special unit at the central bank with details of those accounts and remittances to and from them."

Egypt accuses Bush

An Egyptian government newspaper on Thursday accused US President George W. Bush of making empty promises to the Arabs on the creation of a Palestinian state.

Salama Ahmed Salama, the editorialist at Al Ahram daily, said the United States was beginning to lose incentive to bolster Arab support for the US-led war on terrorism.

"Now that the US military campaign has had some success against the Taliban and that Northern Alliance forces have entered the Afghan capital Kabul,

Egyptian cabinet reshuffle

New appointments to four Egyptian cabinet posts will be announced soon, while Economy and External Trade Minister Yusef Butros-Ghali will lose his economy portfolio, government newspapers said Wednesday.

Slated for change are Minister of Technological Development and Industry, Mustafa Al-Rifai, Minister of State for the Environment Nadia Makram Ebeid, Minister of Planning and International Cooperation Ahmed Al-Darsh and Minister of Electricity and Energy Ali Al-Saidi, Al Ahram and Al-AKhbar newspapers said.

Lebanon, EU

European Commission President Romano Prodi said Monday that Lebanon and the European Union (EU) will sign a partnership agreement within two weeks in Brussels.

"The agreement between the European Union and Lebanon will be sealed within a maximum period of two weeks" in Brussels, Prodi told reporters after meeting Lebanese Prime Minister Rafiq Hariri.

A government source told AFP that Hariri will travel to Brussels within two weeks, heading a delegation including Economy Minister Bassel Fleihan who will be charged with initialing the accord before its final ratification by the Lebanese parliament.