Dec 10 - 16, 2001
Russian soothes OPEC with 150,000 bpd oil export cut
Oil prices rallied Wednesday after the Russian government
announced it would reduce oil exports by 150,000 barrels per day from January 1,
2002, following pressure by the Organisation of Petroleum Exporting Countries.
The reduction, announced after a meeting between Prime
Minister Mikhail Kasyanov and Russia's leading oil producers, brings Russia into
line with OPEC demands but experts warned it was unlikely to have much effect on
the country's booming levels of production. "The government and the oil
groups believe it is possible to make a large cut in exports of crude. From
January 1, 2002, oil exports will be reduced by 150,000 barrels a day," the
government statement said, as reported by Interfax news agency.
Kasyanov told Russian television the objective was "to
stabilise oil prices" on international markets "within a range between
20 and 25 dollars." The markets immediately reacted to the report, the
price of benchmark Brent North Sea crude surging to 20.05 dollars a barrel at
London's opening, compared with 19.29 dollars at Tuesday's close, and rose
rapidly to 20.10 dollars. It was the first time for three weeks the oil price
had opened a session above 20 dollars. And in Vienna an OPEC official described
the announcement as "really good news."
Russia "has shown great willingness to fully cooperate
with OPEC and other producers to stabilise the market," the official said.
Previously Russia had offered a cut of only 50,000 barrels a
day, or 0.7 per cent of its total production, for the 2001 fourth quarter.
Qatar's Oil Minister Abdallah al-Attiyah said Tuesday that
OPEC hoped Russia would reduce its production by 180,000 barrels a day, a large
slice of the 500,000 barrel a day it wants from non-OPEC members as a condition
for agreeing to reduce its own exports by 1.5 million barrels a day.
Saudi budget to slide back into red
OPEC giant Saudi Arabia will end the current year in the red
with a budget deficit of 3.2 billion dollars following only one year of surplus
since 1982, an economic report said Tuesday.
The Riyad Bank in its quarterly review forecast revenues to
drop from a projected 57.3 billion dollars to 54.1 billion, while expenditures
were expected to remain unchanged on 57.3 billion dollars.
The kingdom had projected a balanced budget of 57.3 billion
dollars for 2001 on the basis of an oil price of around 22 dollars a barrel and
an average daily output of more than eight million barrels.
The bank forecast that oil revenues will drop from the budget
projections of 44 billion dollars to 41.3 billion due to the decline in oil
prices and repeated output cuts.
The Saudi Arabian Monetary Agency (SAMA), the kingdom's
central bank, said last week the Saudi budget boasted an actual surplus of 6.1
billion dollars in 2000, down from the projected surplus of 12 billion dollars.
This was the first surplus in oil-rich Saudi Arabia since
1982, and was due to a surge in oil revenues.
The report, prepared by Riyad Bank's chief economist Zahid
Khan and senior economist Abdulwahab Abu-Dahesh, estimated the average price for
Saudi oil in 2001 to be around 22 dollars a barrel.
Average oil production was estimated at 7.8 million barrels a
day, some six per cent lower than last year's average of 8.3 million barrels.
As a result of the oil market weakness, the report forecast
that next year's government revenues would decline to 46.4 billion dollars and
that the government would cut expenditures to 53.3 billion dollars, a drop of
seven per cent from 2001.
This would leave a large deficit of 6.9 billion dollars for
2002, the bank said. The report forecast essentially flat real economic growth
for 2001, just 0.2 per cent in Gross Domestic Product (GDP), mainly due to a 5.4
per cent drop in the oil GDP.
Syria adopts promising budget
Syria has adopted a promising budget for 2002, providing
large spendings for infrastructure projects with the overall aim of facilitating
investments and boosting growth, which has long been static.
Next year's budget was approved Saturday by Syrian President
Bashar Al-Assad, two days after it was endorsed by parliament with projected
expenditure totalling 356.4 billion pounds (7.12 billion dollars), an increase
of 10 per cent.
The budget's adoption comes as Syrian politicians expect a
new cabinet to be sworn in in the next few days to replace the government of
Prime Minister Mohammed Mustafa Miro which was formed in March 2000.
Turkey moves to revive crisis-hit economy
Turkey announced a series of measures Friday to help speed a
recovery in the country's industrial and commercial sectors, badly hit by a
severe economic crisis that has plagued the country since February.
The package, agreed on after lengthy talks between the
government and the Union of Chambers of Commerce, Industry and Commodity
Exchanges (TOBB), aimed primarily to facilitate loan repayments for troubled
companies, ease tax burdens and make investment incentives more efficient.
Lebanon introduces 10 per cent VAT
Lebanon's parliament has approved the introduction of a 10
per cent value-added tax (VAT), to take effect February 1, in a move to increase
revenues and redress the country's economy.
The tax, adopted late Wednesday, was meant to help the state
collect some additional 800 billion pounds (533 million dollars) each year,
according to finance ministry officials.
The parliamentary session was followed by two separate
meetings at the presidential palace to discuss privatisation of the electricity
and telecommunication utilities, they said.
The meetings, headed by President Emile Lahoud, grouped Prime
Minister Rafiq Hariri, Energy Minister Mohamad Abdel Hamid Beydoun,
Telecommunication Minister Jean-Louis Qordahi and Deputy Prime Minister Issam
Finance Minister Fouad Saniora said during the vote on VAT
that the tax will help ease the yawning budget deficit in a country suffering
from a public debt of 25 billion dollars.
Israel shells Palestinian refugee camp in Gaza Strip
Tanks shelled Khan Yunis refugee camp in the central Gaza
Strip after Israel promised the Palestinian Authority a temporary respite from
its military onslaught, witnesses and Palestinian security sources said.
Five tank shells crashed through three houses in the area,
Three people were injured by the blast, including a child
wounded in the head by shell fragments, hospital sources said.
An Israeli army spokeswoman said that troops had responded to
Palestinian fire on the Jewish settlement of Neve Dekalim.
They fired towards the source with light weapons, not tank
cannons, she said.
Israel has said it would halt assaults in the Gaza Strip and
the West Bank for at least 12 hours, so that Palestinian leader Yasser Arafat
could make good on pledges to arrest Islamic militants, a senior Palestinian
political official told AFP.
Saudi to remain open for foreign investments
Saudi Arabia will remain open to foreign investment despite
any negative fallout from the September 11 attacks in the United States, Crown
Prince Abdullah bin Abdul Aziz said in remarks published Monday.
"Be assured that, God willing, your government will
continue to extend facilities for (foreign) investments," Prince Abdullah
told a large group of Saudi businessmen overnight.
Palestinian-Israeli security meeting Friday: Arafat
US special envoy Anthony Zinni has arranged a security
meeting between the Palestinians and Israel on Friday to try to defuse their
knife-edge crisis, Yasser Arafat said.
The Palestinian leader said he had been phoned by Zinni and
that the US envoy, who also met with Israeli Foreign Minister Shimon Peres, had
told him the security meeting was on.
Arafat told reporters after talks with Egyptian Foreign
Minister Ahmed Maher that he agreed, saying the meeting would take place Friday
morning but without giving a venue.
Egyptian FM meets Arafat
Egyptian Foreign Minister Ahmed Maher met Palestinian leader
Yasser Arafat as part of efforts to defuse the crisis in the Israel-Palestinian
Maher and Arafat met for iftar, the meal which breaks the
dawn-to-dusk fast during the Muslim holy month of Ramadan, following the foreign
minister's talks with Israeli Prime Minister Ariel Sharon.
"I cannot say we see eye-to-eye because there are still
points of difference," Maher said about his meetings with Sharon and his
Israeli counterpart Shimon Peres.
Sharon gave Maher a series of demands to be passed on to
Arafat which he expects the Palestinian leader to comply with, a source in
Sharon's office said.
Tehran condemns Blair's remarks
Iranian state radio condemned British Prime Minister Tony
Blair's remarks on alleged Iranian support for terrorist activities, arguing
they revealed Britain's "two-faced" nature.
"These remarks do not contribute to the improvement of
relations between the two countries. On the contrary, they feed the Iranian
people's distrust of Britain," the radio said in a commentary.
Tehran Radio added that "instead of preaching on
terrorism by accusing Iran, Tony Blair would do better to expel from his
country" the People Mujahedin, Iran's main armed opposition movement.
Iraq accuses UN of blocking contracts
Iraqi Trade Minister Mohammad Mehdi Saleh accused the UN
sanctions committee of blocking six billion dollars worth of contracts concluded
within the framework of the "oil-for-food" program.
Revenues from Iraqi oil sales reached more than 48 billion
dollars under the five-year-old program, whose 11th six-month phase started on
December 1, Saleh said, quoted by the weekly Alif Baa.
Of this amount, 15 billion dollars worth of food, medicines
and other goods had reached Iraq and 18.5 billion dollars had gone to finance UN
activities in Iraq and pay reparations for victims of the 1991 Gulf War, he
Of the balance, six billion dollars worth of contracts were
still blocked by the UN sanctions committee, and nine billion dollars worth of
contracts "have been held up for a long time and goods (purchased under
these contracts) have yet to arrive," Saleh said.
Abu Dhabi signs loan deal
Abu Dhabi Water and Electricity Authority (ADWEA) Saturday
signed a 1.285-billion-dollar loan agreement with a consortium of 25
international and regional banks to finance its third independent water and
The project provides for building a plant at Shuweihat, 250
kilometers (150 miles) west of Abu Dhabi, that will include a gas-fueled
1,500-megawatt power plant and a water desalination facility with a capacity of
100 million imperial gallons per day.
The plant is expected to come on stream in 2004.
British energy group International Power and US company CMS
Energy, joint developers of the project, will operate and maintain power and
desalination operations at the plant for 20 years. The German group Siemens is
leading the construction of the plant, which will cost 1.6 billion dollars.
Berbers clash with police at protest
Fighting broke out on Thursday in a north east Algerian town
between security forces and thousands of Berber demonstrators calling for
cultural and linguistic recognition in the country.
Police in Tizi Ouzou, the capital of the predominantly Berber
region of Kabylie, used tear gas grenades in an attempt to move the young
Berbers staging a sit-down protest outside the headquarters of military police.
Stones and Molotov cocktails were thrown and anti-government
slogans chanted by the protesters, who are furious at attempts by more moderate
members of the Berber community to enter dialogue with the Algerian Government.