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 1. INTERNATIONAL   2. INDUSTRY
 3. FINANCE  4. POLICY
 5. TRADE  6. GULF

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GULF

May 20 -June 02, 2002

OPEC MAY STRIKE DEAL WITH RUSSIA

Opec is hopeful of striking a deal with the world's second largest oil producer, Russia, on oil output cuts despite the Russian announcement not to extend the current output cut deal beyond the second quarter.

Opec plans to hold talks with the Russian government on the possibility of extending oil output restrictions, before the end of second quarter, Opec press secretary Abdurrahaman al-Kharaigi said. There is a possibility that Opec may consider revising the export output quotas of the member countries upward, depending upon the prevailing market situation then, in its third quarter meeting in September, but not now.

The Opec press secretary said: "We hope that Russia will cooperate with us as long as it is necessary to establish a fair price for oil. In my opinion, the current prices do not correspond to fundamental pre-requisites on the market," he said.

Al-Kharaigi noted that during the extra-ordinary Opec conference in June, the group does not intend to plan any increase in production quotas of the member states. "However, by September, when the next conference will take place, the situation might change," he observed.

However, despite the initial reaction from the market to shed prices, there is also a consensus prevailing here that the Russian decision was insignificant in many ways. The commitment form Russia, to the output cuts has always been questionable. Despite the formal Russian announcement to accept an output cut of 150,000 barrels per day (about five per cent of its total output), in line with the Opec cuts, there have been instances in recent weeks when market was supplied with Russian oil via the former Soviet republics. There have been question marks about the Russian commitment to the output cuts, analysts generally say.

SAUDI BORDER WITH IRAQ TO OPEN NEXT WEEK: OFFICIAL

The main border crossing between Saudi Arabia and Iraq at Arar, closed since Baghdad's 1990 invasion of Kuwait, will be reopened for trade next week, a Saudi customs official said on Wednesday.

"We have completed preparations for the opening of the post. The first truck with Saudi exports is expected to go through Arar next week," the official, who asked not to be identified, told AFP. "We are ready to begin at any moment. We are only waiting for the Iraqi side to be prepared and waiting for the green light from the foreign ministry after consultations with the United Nations.

"In the first phase, only Saudi trucks will be allowed to use the crossing, but later, trucks coming from other Gulf countries will be allowed," he added. Over the past 12 years, the post was opened only from time to time to allow Iraqi pilgrims into Saudi Arabia, home to Islam's holiest sites.

Saudi exports to Iraq under the oil-for-food programme introduced in 1996 to allow Baghdad to sell crude under UN supervision to meet the humanitarian needs of its sanctions-stricken population are currently sent through Jordan. Saudi businessmen say that exporting directly to Iraq will save them between eight and 10 percent in operating revenues. Saudi importers were last week given the nod to re-export non-Saudi products to Iraq in a bid to boost trade despite the absence of diplomatic ties between the two Arab countries since the 1991 Gulf War.

The decision came during a visit to Riyadh by Iraqi Minister of Industry and Minerals Muyasser Shallah, who presented a plan to Saudi officials for a bilateral free-trade accord. Iraq has awarded Saudi firms trade contracts worth 64.7 million dollars since the start of 2002 under the oil-for-food programme, with about 49 million dollars of the contracts going to Saudi private firms in the past two weeks.

Iraqi Trade Minister Mohammad Mahdi Saleh said earlier this month that Baghdad had imported more than one billion dollars worth of goods from Saudi Arabia within the framework of the humanitarian programme.

GCC MAY EXEMPT MORE IMPORTS FROM CUSTOMS

GCC states are considering exempting more imported products from tariffs when they enforce their customs union early next year to meet free trade terms by the World Trade Organisation (WTO), officials said yesterday.

The recommendation was made at a meeting in Riyadh this week by the GCC's WTO Committee, which is holding regular talks to ensure the landmark customs union that will merge regional economies will not contradict with WTO trading rules.

The participants from the economy and trade ministries in the six member states asked Oman as the current GCC chairman to formally inform the Geneva-based organisation about the group's decision to move forward its plans to create a customs union to the beginning of 2003 from the original schedule in March 2005.

DUBAI UNVEILS TECHNOLOGY FREE ZONE

Dubai unveiled a new free zone - Mohammed Bin Rashid Technology Park - to smoothen technology transfer to the region, and to create infrastructure and extend research and development facilities to global technology leaders.

According to the plan, three square km land on the south side of Sheikh Zayed Road, close to the Jebel Ali Free Zone will be developed initially, to create infrastructure, buildings, laboratories, research facilities by the Dubai Government.

EGYPT ENERGY SCHEMES SNUB ISRAEL

Egypt is fostering energy cooperation with its Arab neighbours and beyond, while keeping Israel at bay in another sign of anger at its treatment of the Palestinians, industry sources said on Wednesday. A Western oil executive said Libya is reinforcing Egypt's decision to reduce cooperation with Israel by negotiating with Cairo to take over the stake formerly held by Israeli investors in a 1.2 billion-dollar refinery in Egypt.

The equity sought by the Libyan government in the Middle East Oil Refinery, or Midor, "is likely to be part or all of National Bank of Egypt's 39 percent share," said the London-based International Oil Daily (IOD) received here on Wednesday. The bank last year bought the 23 percent share held by Israeli concerns, among them investment group Merhav, raising to 39 percent its own stake in the refinery built in the Mediterranean port city of Alexandria, said IOD, quoting industry sources.

BRISK BUSINESS AT HOTEL EXHIBITION

Many of the 180 exhibitors at the region's leading hotel supplies exhibition which ended at the Airport Expo Dubai reported brisk business deals.

At the Hotel Show which drew 3,500 hotel trade visitors, the British husband and wife business partnership of Alan Mitchell and Carol Conci could win $4 million worth of business as a result of their joint efforts. His company, Lighting Design Partnership International, is expecting to firm-up orders worth $1.25 million to design lighting for at least ten Middle East hotels, and that could mean her company, ConciLuce, supplying the lighting equipment at around $300,000 per hotel.

IRAN PRAISES UAE FOR IMPROVING RELATIONS'

The Islamic Republic of Iran praised the UAE for improving bilateral relations and welcomed "the positive role played by the UAE in this regard".

Iranian Minister of Defence Admiral Ali Shamkhani expressed his country's readiness for constructive cooperation with the UAE. He described friendship between the two countries as necessary for solving existing problems.

IRAN, IRAQ BRUSH ASIDE US TERROR ACCUSATIONS

New US accusations that Iran sponsors terrorism are irresponsible and further damage any chances of establishing ties between Washington and Teheran, a senior Iranian official said.

In Iraq, another of the seven countries named as sponsors of terrorism in a State Department report on Tuesday, the official Al Thawra newspaper charged that the US administration was the most active supporter of terrorism worldwide through "wars and genocide" it had waged in different parts of the world.

IRAN'S LEADER BLASTS

Iran's supreme leader Ayatollah Ali Khamenei blasted the idea of talks with the United States on Wednesday as "treason" and "stupidity", in a bid to silence allegations that secret talks have taken place between the two foes.

BANKING CIRCLES

Allied Deals Holding, the UAE-based company currently under investigation by the US prosecutors in connection the $600 million metals trading scam, has come into the spotlight because it had acted as the guarantor for a $21.5 million credit line for its US subsidiary, which is accused of leading the global scheme to secure bank loans for illusory metal-trading deals.

EBI NET DOWN, ASSETS UP

Emirates Bank International has reported a 25 per cent decline in its net profit while the bank's total assets moved up by 6 per cent during the first quarter of 2002.

The net profit of the bank for the first three months of 2002 is 113.85 million, down by 37.9 million from 151.84 million in the first quarter of 2001.

DUBAI NATIONAL INSURANCE

Dubai National Insurance company has reported a net profit of Dh3.01 million for the first quarter of 2002, against Dh284,000 during the same period last year.

CRM SPENDING

Spending on Customer Relationship Management (CRM) solutions will reach $44.5 billion worldwide by 2006 and the Middle East will be major part of this growth.

MICROSOFT TO INVEST

US software giant Microsoft has announced that it is investing in Estarta Solutions, a leading software development company in the Middle East and North Africa (Mena).

Estarta Solutions was the result of the business combination of two major Jordanian software companies: Zeine Technological Applications and Oneworld Computer Programming. While maintaining its ongoing business in American and other developed countries' IT markets, Estarta Solutions will focus its operations on the MENA Information Technology ("IT") services market, said a Microsft Press release.

ENTERPRISE DATA NETWORKS SECTOR TO WITNESS STRONG GROWTH

With 114 new hotels expected to come up the Gulf region by the end of 2005, the hospitality industry will see integration of their communications, data and building management systems, says a senior Siemens offical.

Joachim Kundt, CEO of Siemens LLC, the regional arm of the German giant, says that in the enterprise data networks sector alone, the AGCC region is estimated to grow to a market size of 199 million euro by 2006.

AL MASHRIQ IN DH10M DUBAI PARK PROJECT

Dubai's Al Mashriq Furniture Manufacturing LLC (AMFM), which currently manufactures sofas and chairs in a factory in Al Quoz, is investing Dh10 million in a factory at Dubai Investment Park.

The project was announced at The Office Exhibition, the Middle East's first dedicated trade show for the office interiors and facilities management sector, which closed a three-day run at the Airport Expo Dubai, alongside The Hotel Show, last night.

LINKDOTNET ACQUIRES NINE ARAB NET COMPANIES

LINKdotNET, one of the Arab world's Internet services powerhouse, announced the acquisition of nine leading Egyptian Internet companies in a share swap deal that will raise its current value to 365 million Egyptian pounds.

Through the acquisitions LINKdotNET will own eight new online businesses ArabFinance.com,CareerMidEast.com, E-Dar.com, El3ab.com, Masrawy.com, Mazika.com, Nilemart.com and Otlob.com. The ninth is Internet Egypt, one of the largest independent ISPs (Internet service providers) in the country and the biggest lease line provider across Egypt.

ADCB SHARES HIT THE ROOF

Abu Dhabi Commercial Bank continued from where it left off on Monday by gaining Dh11 to close at Dh520. The most "exuberant" performer for the last two days, the scrip gained Dh45 in the period.

On Monday it was the biggest gainer by putting on Dh34 and finishing at Dh509.

ALGERIA SECURES UAE INVESTMENTS

Algeria has secured some Dh555 million the UAE investments in different projects since September 11 and expects more investments from Arab countries which have begun investing within the Arab world.

Sharjah's Gibca Group and Abu Dhabi's Al Hajiri Group have invested in projects related to construction, aluminium manufacturing and a tissues producing factory in Algeirs.

BAHRAIN PROPERTY FIRM SET UP

A Bahrain-based $50 million GCC property development company has been formed by Bahrain's Gulf Finance House (GFH) and Kuwait's Gulf Investment House (GIH).

The Gulf Construction Co has a paid-up capital of $16 million and has obtained necessay approvals from Bahraini authorities, said a GFH statement.

PALESTINIAN MILITANT LEADER KILLED

Israeli forces have killed a Palestinian militant commander and two other people in an attack on the Balata refugee camp outside Nablus.

In a statement, the Israeli military described one of the dead, Mahmoud Titi, leader of the al-Aqsa Martyrs' Brigades group at the camp, as a "senior terrorist" who was responsible for many attacks against Israelis.

UN BEGINS SUDAN AID DROPS

The United Nations food agency has begun dropping food aid to rebel-held areas in central Sudan under a ceasefire agreement to allow humanitarian aid in to the stricken Nuba mountains region.

The UN World Food Programme (WFP) said 4,000 tonnes were to be delivered to the region - a stronghold of the Sudan People's Liberation Army (SPLA).