GULF

 

Sep 30 - Oct 06, 2002

 

1.INTERNATIONAL

2. INDUSTRY

3. FINANCE

4. POLICY

5. TRADE

6. GULF

 

OIL PRICE SOARS ON WAR FEARS

The price of oil has surged above $30 a barrel again, hitting a 19-month high as traders fret about the likelihood of war in the Middle East.The rising tension in the Middle East as Israeli forces have flattened most of the Palestinian Authority's headquarters, threatening Yasser Arafat, has raised tensions still further.

Oil producers cartel Opec resisted international pressure earlier this month to raise output in order to calm markets unsettled by the prospect of a war between the US and Iraq.

Leaders of oil producing nations have brushed off the latest price rise.

"We are watching the markets closely but we are not worried yet," Opec secretary general Alvaro Silva Calderon said.

Crude oil for delivery in November rose $1 in electronic trade in New York to $30.84 by midday on Monday.

In London, Brent crude for November delivery was up $0.82 to a new high for the year of $29.25.

An Iraqi government spokesman said over the weekend that his country would not accept any new resolutions on weapons inspectors that overturned its agreement with UN secretary general Kofi Annan.

Iraq's agreement to re-admit UN weapons inspectors for the first time since 1998 had cooled rising prices in recent days.

The price of oil has risen more than 40% this year on fears of a Middle East war.

Opec members have agreed to restrict output through production quotas in order to support the oil price.

However, Opec is committed to increasing production if the oil prices break out of its target range of $22-28 a barrel for 20 days.

The Opec secretary general reportedly repeated that promise on Monday.

ABU DHABI BOOSTS ZAKUM OUTPUT

Abu Dhabi has completed a major project to boost the production capacity of its giant offshore Zakum oilfield through a successful gas injection process, as part of an overall programme to upgrade the emirate's crude output capability.

The Pilot Gas Injection Project has been 'successfully accomplished' and it involved the utilisation of a 4,000-tonne gas injection platform at the field, according to Abu Dhabi Marine Operating Co (Adma-Opco), one of Zakum's operators.

It said the platform, a joint venture between Adma-Opco and the Zakum Development Co (Zadco), has the capacity to inject up to 100 million cubic feet per day of high-pressure hydrocarbon gas to each of the Lower and Upper Zakum reservoirs.

"The project involved various technical design innovations that were managed by the project team," it said in its monthly bulletin. "These included the use of dry gas seal for the compressors and modern control systems, with performance control and load sharing."

Majid Al Suwaidi, manager of Zakum asset unit, said the team faced many challenges during the commissioning of the field.

He said the need to adapt to the introduction of a high-pressure system necessitated careful planning and co-ordination to ensure safe operation of the plant and less interruption of production.

"This achievement has been a joint effort involving people from organisations such as Adma-Opco, Zadco, Technip (of France) and the National Petroleum Construction Co, in addition to the extensive support from suppliers and contractors who provided equipment, material or support services."

Experts said gas injection was a commonly used but expensive technique to maximise oil output and it had been used extensively in the UAE's main fields.

U.S., BRITAIN LOBBY FOR IRAQ RESOLUTION

The United States and Britain launched a joint campaign to muster support for a strongly worded U.N. resolution demanding Iraq disarm and threatening consequences if it doesn't comply.

Secretary of State Colin Powell decided to send senior U.S. official Marc Grossman to Paris and Moscow to explain the elements of the resolution on Friday and Saturday.

Grossman, who will travel with a British envoy, briefed Chinese Assistant Foreign Minister Zhou Wenzhong in Washington, officials said.

The United States, Britain, France, Russia and China are the five permanent members of the U.N. Security Council, each with veto power to block a resolution.

OMAN STAYS AHEAD OF OTHER GULF STATES IN PRIVATISATION

Oman has been a pioneer in privatisation in the Gulf, and if recent developments are any guide, the sultanate will maintain an edge over its neighbours. In the past few months, privatisation in the country has got fresh boost, with progress achieved on several fronts.

A group led by the British Airports Authority formed Oman Airports Management Co to takeover the country's primary gateway. It has a 25-year contract to manage Seeb and Salalah airports.

An investment of some 100 million riyals ($260 million) aims to transform the two airports, starting with Seeb International Airport. Feasibility studies to expand Seeb airport are due to be completed in early 2003. Phase one is designed to increase passenger throughput at the airport from 2.3 million to 6.5 million by 2006.

In telecoms, in late August, the government formed the Oman Telecommunications Regulatory Authority as an independent regulator, partly to oversee the privatisation of Oman Telecommunications Co (Omantel).

CHEMICAL PLANT COMING UP IN CAPITAL

A new Dh60 million chloralkali plant to produce ultra-pure chemicals is being set up in Abu Dhabi's industrial city by Al Jaber Group. The state-of-the-art plant will be financed by debt and equity with Emirates Bank International providing the loan.

Incorporated early this year, Safewater Chemicals LLC, a 100 per cent nationally-owned company, will build and operate the plant. Commercial operations will start in the second half of 2003.

"It is the first such plant in the UAE, and perhaps in the Gulf, to produce such products with such technology," Jaber Al Jaber said.

Atkins Process is handling its process and detailed engineering work. Successful bidders for three major process units will be announced shortly.

The process to be used in the plant is based on environment-friendly technology and will have electrolytic membrane cell modules, caustic soda concentrator and hydrochloric acid absorber. "The chemicals produced will be strategically important for oil well management and potable water disinfection," he said.

 

MAKE PUBLIC SECTOR VIBRANT WORLD BANK

The World Bank has urged regional governments to enhance the performance of the public sector, saying government inefficiency is the "number one risk" to investments.

"Financial deficits are only symptoms of performance deficits in the public sector," Professor Prajapati Trivedi, WB's senior resident economist in Saudi Arabia, told a group of government officials and business leaders at the UN House in Manama.

He said the question that should be paramount in the minds of policy-makers and citizens in the region is not whether to privatise but how to privatise state-owned enterprises and attract private participation.

IRAN MOVES TO AVERT IRAQ STRIKE

Iran, keen to avert war in neighbouring Iraq, said it was to hold talks with foreign ministers from both its old enemy Baghdad and Washington's closest ally Britain.

Iran fought a bitter eight-year war with Iraq in the 1980s and is no friend of President Saddam Hussain, but it fears an attack on Baghdad by its arch-foe the United States could dangerously destabilise the Middle East.

DUBAI 2003 SIGNS PACT WITH AUDI

Dubai 2003 has signed a partnership agreement under which the German luxury car manufacturer Audi will supply limousines for government leaders and senior officials during the annual meetings of the World Bank Group and International Monetary Fund that will be held in Dubai in September 2003.

The agreement was signed by Dubai 2003 general coordinator Ibrahim Belselah, and the chairman of Audi AG, Dr Martin Winterkorn and the board member for marketing sales, Dr. Georg Flandorfer, during the Paris Motor Show.

OMANI BANKS

Omani banks have limited banking opportunities in a slow-growing private corporate sector, and do not have the critical mass to finance large government projects, according to a report released by Standard & Poor's (S&P).

BRISK BUSINESS

The first week of Dubai's new exhibition season came to a close with exhibitors and organisers impressed with the level of business.

Gulf Beauty, Beauty Shopper and Moda Arabia closed on Wednesday, while Motexha Autumn, Ambiente Arabia and Arab Hunting shut their doors.

ANNAN DEPLORES ISRAEL'S GAZA ATTACK

United Nations Secretary-General Kofi Annan has condemned an Israeli missile attack in the Gaza Strip that killed at least two Palestinians and wounded about 40 others.

Mr Annan called on Israel to halt military action in densely-populated areas, and said he was deeply concerned about the possible consequences of the attack.

KUWAIT PREPARES FOR WAR

The debate over whether to go to war with Iraq is being watched with growing interest in the Gulf.

US forces have been building up in Kuwait, officially for an exercise, but as the only Arab country likely to fully back a war with Saddam Hussein, Kuwait is likely to be in the firing line.

DUBAL TARGETS MALAYSIAN SMELTER

Dubai Aluminium Co (Dubal) is in talks with the Malaysian government and some private companies to buy a stake in the $2.1 billion aluminium smelter to be set up in eastern Sarawak state.

The smelter to be built near the port city of Bintulu, 180 kilometres from the Bakun hydroelectric project, will have an initial capacity of 250,000 tonnes a year, which is likely to increase in stages.

UNION PROPERTIES

Union Properties has spun off its facilities management services into a separate company, ServeU, which will look at projects in the UAE and the other Gulf states.

This is the second subsidiary to emerge from the company's fold in the last five months Edara was created in May to offer project management again with a GCC mandate.

ENVIRONMENTAL IMPACT OF MEGA PROJECTS

The rapid pace of development in the Gulf, and particularly in the UAE, has meant a great deal of projects covering the oil and gas sector and, of course, infrastructure developments. This is natural in the course of economic development and is to be expected in such circumstances.

However, as someone who has lived in the country for long, my concerns remain about the environmental impact that is being created by these mega projects, some of which involve dealing with the seabed of what is already a fragile eco system.

NBK TO OPEN SAUDI BRANCH

National Bank of Kuwait (NBK), the largest financial institution in Kuwait, has become the third foreign bank to get approval for a branch in the Kingdom of Saudi Arabia.

REMITTANCES TO BANGLADESH JUMP

Bangladesh through official channels have jumped considerably in the last one year although the hawala system cannot be eliminated totally, said a senior visiting Bangladeshi banker.

Meanwhile, two private banks from Dhaka are offering facilities to Non-Resident Bangladeshis (NRBs) through their agents in the UAE. The services, however, are restricted to opening accounts.