. .

 5. TRADE  6. GULF



Jan 21 - 27, 2002

Opec income expected to remain high despite gloom

Opec is expected to lose only around $11 billion this year because of lower production and prices, but the income remains much higher than the 1998 earnings.

The group's oil export revenues, excluding those of embargo-bound Iraq, totalled nearly $166 billion last year, and they are expected to slide to around $155 billion this year, according to estimates by the London-based Centre for Global Energy Studies (CGES).

Expectations that the 2002 income will be relatively high are in contrast to recent speculation that the 11-nation group could stagger under steep revenue declines this year because of a global economic slowdown following the September 11 suicide bombings in the U.S.

"The price of Opec's basket of seven crudes averaged around $23.1 last year and it is projected to be around $22 this year," said Leo Drollas, deputy director of CGES, which is owned by former Saudi oil minister Sheikh Ahmed Zaki Al Yamani.

"We expect the average to be around $19.5 in the first half of this year and $25 in the second half ... the reason for the increase is that global stocks are not very high except in the U.S.," he told Gulf News.

CGES's estimates showed Opec produced nearly 27.1 million barrels per day, including Iraq's output, and supplies are expected to slide to about 26.5 million bpd this year following Opec's decision to cut output by 1.5 million bpd from January 1 to prop up prices.

Experts said they did not expect Opec to fully comply with that agreement, which also included a deal with Russia and other major non-Opec crude exporters to reduce output by around 470,000 bpd.

"Opec never complied fully with any of its agreements ... the expectations this time are that compliance with its latest decision will be around 60 per cent," said Mehdi Varzi, director of the Global Oil and Gas Research Centre, also based in London.

U.S. begins to probe hawala deals in Gulf

Hawala and other alternate remittance channels used by millions of Asian expatriate workers in the GCC and even in the West, to send money home, is being probed by officials combating terrorist financing, confirmed a top U.S. Treasury Department criminal investigator.

"The alternative system poses the biggest challenge to the U.S. Government and the authorities are placing all institutions working on U.S. soil under the ambit of the regulatory regime, especially in the post-September 11 era," stated John Cassara, senior special agent in the U.S. Treasury Department's Financial Crime Enforcement Network.

Preliminary discussions on dealing with hawala have already been initiated with the GCC monetary authorities, with the U.S. also planning to work with the relevant Indian and Pakistani authorities.

"The war against terrorism is multi-faceted, involving increased vigilance in financial transfers, and the fight against terrorist financing needs to include hawala," he declared.

Under the hawala system in existence for ages an expatriate South Asian worker hands over local currency to a money dealer whose representative in the respective country delivers the equivalent, plus a mark-up, to the worker's nominee, usually a family member.

The expatriate thus gets a better exchange rate sans banking charges while the dealer gets foreign currency. The authorities in both countries are kept in the dark about these transactions.

Cassara noted that this parallel mode of sending money is very sophisticated. It is also undeniably very popular: "Of the estimated $10 billion remitted annually to Pakistan, only $1 billion is sent through the regular system.

Bank guarantee scheme misused

The bank guarantee scheme initiated by the Ministry of Labour and Social Affairs a few months back is allegedly being misused by some establishments, leaving their employees in a Catch-22 situation.

Though the government move has been sincerely aimed at protecting the labourers against the possible non-payment of salaries or other dues, the reality is that some of these establishments press the labourers themselves to cough up the required Dh3,000 for themselves.

This is specially so in cases of fresh recruitment, where the amount is added to the commission a prospective employee pays to get a job and visa before he arrives here.

Employees in such firms are being given strict warning not to reveal the modus operandi of raising deposits.

Abu Dhabi-Iran joint venture in Shell deal

The joint venture of Abu Dhabi-based National Petroleum Construction Co (NPCC) and Iran's Naft Sazeh Qeshm (NSQ) has signed a contract with Shell Exploration BV for the construction of facilities for use in the development of Iran's Soroosh/Nowrooz oil fields, official sources said.

NPCC and NSQ will be responsible for the engineering, procurement, installation and construction management of the facilities that comprise three production platforms, two living quarters platforms, two wellhead platforms and associated pipelines.

"It is the largest contract for surface facilities to be signed to date in the development of the Soorosh/Nowrooz oil fields," said John van den Bergh, general services manager, Shell EBV, in the latest Shell in the Middle East edition.

UAE posts growth in money supply

Money supply expanded by Dh1.08 billion ending third quarter 2001 to reach Dh38.10 billion, registering a 2.9 per cent increase over the second quarter, the latest statistical bulletin of the UAE Central Bank said.

The money supply components review indicates that monetary deposits rose by Dh1.01 billion (3.7 per cent) to touch Dh28.33 billion, and currency with the public rose by Dh64 million (0.7 per cent) to reach Dh9.77 billion.

According to Central Bank figures, private domestic liquidity decreased during the third quarter of 2001 by Dh656 million (0.4 per cent) reaching Dh152.97 billion, as a result of the decrease in quasi-monetary deposits by Dh1.73 billion (1.5 per cent) to reach Dh114.87 billion, against Dh116.61 billion in the previous quarter.

The overall liquidity rose by Dh412 million (0.2 per cent) to reach Dh191.49 billion, owing to the increase in government deposits by Dh1.07 billion (2.9 per cent) where they reached Dh38.52 billion against Dh37.45 billion ending June 2001.

U.S., Saudi stress strong ties despite bad publicity

U.S. and Saudi officials trying to salvage a long friendship strained by the September 11 attacks pledged to work together against what they called bad media publicity in both countries.

"We in the kingdom are certain that any questioning of the depth and strength of our relationship is short-lived because this friendship is based on common interests and shared goals," Saudi National Economy Minister Ibrahim Al Assaf said.

Assaf was speaking at a meeting of the U.S.-Saudi Business Council. It coincided with a visit by U.S. Assistant Secretary of State for Political and Military Affairs Lincoln Bloomfield to discuss the U.S. military presence in the kingdom.

Iraq defiant over US threat

Iraqi President Saddam Hussein has said Baghdad is ready for another full-scale attack by America but would defeat any new military campaign.

In a speech marking the 11th anniversary of the start of the Gulf War, the Iraqi leader said Iraqis were more confident now than they were in 1991.

Saddam Hussein's address came amid mounting speculation that Iraq could be targeted in America's global war against terrorism.

On Wednesday, US President George W Bush reiterated his demand that Baghdad allow UN weapons inspectors back in or face unspecified consequences.

Emarat eyes expansion after Egypt venture

In a path-breaking venture Emirates General Petroleum Corp (Emarat) has for the first time ventured beyond the UAE to take its brand of retail gasoline stations to Egypt.

The company has signed an MoU with Middle East Oil Tankage and Pipelines (Midtap) to set up a joint venture, Emarat-Egypt, which will set up 69 service stations throughout Egypt.

The agreement was signed last-week December in Cairo by Rashid Al Shamsi, deputy general manager, sales and marketing, Emarat, and Maher Abazza, chairman and CEO, Midtap.

The function to announce the joint venture was attended by Obeid bin Saif Al Nasiri, UAE Minister of Petroleum and Mineral Resources; and Sameh Fahmi, Egyptian Petroleum Minister.

Etisalat deal

Alcatel confirmed it had won a Dh82.5 million (25 million euros) contract from Etisalat for a major expansion of GSM/GPRS PCU network in the Abu Dhabi area.

Fencing of UAE-Oman border starts

Work is underway to install a fence along the UAE-Oman border as part of a plan to fight illegal immigration and limit social and security threats by aliens, revealed Maj. Gen. Saif Abdullah Al Shafar, Assistant Undersecretary for Security Affairs at the Ministry of Interior.

Maktoum issues mortgage law

His Highness Sheikh Maktoum bin Rashid Al Maktoum, Vice President, Prime Minister of the UAE and Ruler of Dubai, in his capacity as Ruler of Dubai, has issued a law, dealing with the mortgaging of properties in the Jebel Ali Free Zone area.

The 20-article law No.1 of 2002, stated that an owner of a property on a government land in the Jebel Ali Free Zone area can make an insurance mortgage on the property excluding the land.

Dubai realty deals surge 80pc to hit Dh9b

The number of real estate deals in Dubai during 2001 recorded an 80 per cent leap to a value of over Dh9 billion, compared to 2000's total of Dh5 billion.

The areas of Mirdif, Al Barsha, Umm Suqueim and Al Shaif recorded the most activity during the past year, as major investors heightened their activity in the realty deals.

Total number of deals struck during the year were 3,198 against 2,636 for 2000, according to an annual report prepared by Dubai Lands Department.

Adnoc ready to consider Ukraine deal

Abu Dhabi will consider a proposal from Ukraine to set up a joint venture oil and gas terminal in the Ukranian sea port of Odessa, visiting Minister for Foreign Affairs of Ukraine, Anatoliy Zlenko, said.

Significantly, the UAE and Ukraine will shortly conclude two agreements an investment promotion agreement and the avoidance of double taxation agreement.

"A proposal has been submitted to Adnoc for participation in the international consortium for an oil and gas terminal at Odessa for oil transportation to western countries," he said, adding that Adnoc has agreed to consider the joint venture.

Arab markets

Going by very early indications, Arab markets could account for shipments of another two million PCs or thereabouts this year, and repeat the record levels of 2001, according to a senior industry source.

"The Arab markets were among the top performers, if not the highest, in the world in terms of PC shipments last year," said Gilbert Lacroix, general manager for the Middle East and Africa at Intel.

"Despite this, two million PCs only represent less than 1 per cent of the overall population of over 300 million. This is far from the levels seen in the high mature markets. Considering these facts, this is very good news for the IT sector.

HFZ reports surge in new entrants

Hamriyah Free Zone has charted a 30 per cent jump in companies registered in 2001, with the total standing at over 200, from 17 countries worldwide, Rashid Al Leem, director general, stated.

The authority has also demarcated four distinct zones petrochemicals, food processing, textiles and wood indicating the potential growth areas it has identified, and the directions in which it intends to expand.

UAE auto sector sales 'marginal'

Despite a rousing performance in the first half of the year, overall new vehicle sales in the UAE during 2001 ended up with an anaemic 1-2 per cent growth, according to a senior industry source.

"There was marginal growth at best, though there were some brands which did better than most others," said Christopher Preston, managing director of Trading Enterprises, the dealership for Honda, Chrysler and Volvo.

In a very tight market, the softening yen is expected to provide a big advantage for the leading Japanese makes this year.

"The prices of our new launches for the Honda reflects the current position of the yen. In fact, our prices reflect this right from the last quarter of 2001 itself."

Syria, Lebanon to unify tariffs

Syria and Lebanon plan to unify customs tariffs in three to five years, thus establishing a free trade zone, said the secretary general of the Syrian-Lebanese high committee, Nasri Khuri, quoted by the press.

Bilateral cooperation is focused on "a project overseeing the scrapping of all hindrances and taxes, including a customs tariffs unification programme for goods imported from other countries in three to five years," Khuri told the Tishrin daily.

Libya agrees on Arab summit

Libya has agreed on Beirut as the venue for the Arab summit to be held in March but its leader Moamer Kadhafi will not take part, officials in Tripoli said.

"The issues over which Libya had reservations have been settled," announced Libya's Minister for African Unity Ali Abdel Salam Triki.

"And therefore, it (Libya) has agreed to the summit being held at the scheduled date and venue," Triki said in a joint declaration to the press with visiting Arab League Secretary General Amr Mussa.