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 5. TRADE  6. GULF



Feb-04 - Feb-10, 2002

Gulf oil output expected to double in 2015

Saudi Arabia, UAE and other Gulf oil heavyweights are expected to double their crude production in 2015 as Opec sets off to resurrect the past situation where it was the undisputed power in the global oil market, experts said.

From around 30 million barrels per day in 2000, Opec is expected to produce nearly 45.9 million bpd of crude oil and natural gas liquids in 2015 and supplies could climb to more than 53 million bpd in 2020 to push the group's market share to more than half, an Opec official said at an energy conference in Abu Dhabi.

"The larger part of the increase will come from the Gulf, mainly Saudi Arabia, the UAE, Kuwait, Iraq and Iran," said Adnan Shehabuddin, director of Opec's research division.

"As far as the GCC is concerned, production could double during that period as they already produce nearly half Opec's total oil output."

But experts at the conference cautioned that massive investments are needed to maximise capacity and avert a threatening gap between demand and supplies.

They gave no cost figures but an expert from the International Energy Agency (IEA) said at the two-day conference that they depended on government policies, sources of supply, upstream technology and industry developments.

"Much of the long-term supply growth will come from the Middle East and the former Soviet Union," said Fatih Birol, head of the IEA's economic analysis division.

"Price stability and security of supply will depend on timely and massive investment... governments can play a key role in this regard," he added.

"Government policies will shape the energy supply shape. Such policies cover research and development, regulatory market frameworks, energy security measures, international trade rules and consumer-producer dialogue."

GCC fiscal system hit by heavy cash outflow

At least $125 billion were siphoned out of the Gulf in five years and the flight has continued unabated to upset the fiscal system and keep pressure on balance of payments (BoP).

Figures by the Abu Dhabi-based Arab Monetary Fund (AMF) showed an average $25 billion was remitted out of the six-nation GCC between 1995 and 2000 and the bulk of the remittances belonged to expatriates.

In 2000 alone, remittances totalled $24.9 billion and bankers said more than two thirds of them were channelled by Asians and other foreigners in the region, estimated at more than 10 million.

"Annual remittances in the GCC are very high in international standards, but this is because of the high number of expatriates working in the region," said Younus Malik of the Saudi National Commercial Bank.

"I don't see any decline in the near future as member states continue to rely on expatriates. Such transfers are among the main factors for the deficits in the balance of payments or the low surplus in some years."

Saudi Arabia has remained the main victim of such remittances, with outbound cash transfers standing at nearly $15.4 billion in 2000, around 62 per cent of the total remittances from the 21-year-old GCC.

Large transfers have combined with higher imports of goods and services, a decline in overseas investments, defence purchases and lower oil prices to put pressure on the current account and BoP in most years.

In 1999, when oil prices averaged around $17, the combined GCC balance of payments recorded a deficit of nearly $3.6 billion. But it sharply rebounded into a surplus of around $19 billion in 2000 after crude prices shot to $27.

The AMF figures showed the GCC's exports soared to around $167 billion in 2000 from $117.7 billion in 1999 after oil sales jumped to nearly $127 billion from $85 billion. Other exports also recorded increases.

Riyadh orders crackdown on money laundering

Saudi Arabia has ordered an immediate crackdown on money laundering activities in the Kingdom. Orders have been issued to 'very urgently' implement measures recommended by a high-level committee set up by the government to combat this issue.

Briefing the newsmen about the outcome of a Saudi cabinet meeting on Monday, the Information Minister Dr. Fouad Al-Farsy said, King Fahd has also ordered the high-level Saudi Arabian Monetary Agency (SAMA) Committee to draft anti-money laundering law in accordance with regulations of the Kingdom and the Gulf Cooperation Council.

The cabinet also decided to invite a team from the Paris-based Financial Action Task Force to evaluate the measures.

Saudi government announced the measures in the backdrop of an international conference on money laundering, jointly organized by SAMA and the Interpol.

Egypt keen to boost trade with UAE

Egypt wants to boost bilateral trade and will work towards setting up a permanent exhibition centre in Sharjah as soon as possible, Mukhtar Abdul Munem Kattab, Egypt's Minister of Public Works, stated.

At a meeting with Sheikh Sultan bin Mohammed bin Sultan Al Qasimi, Crown Prince and Deputy Ruler of Sharjah and Chairman of Sharjah Executive Council, the visiting minister noted there was still scope of boosting two-way trade flows with the UAE.

The minister, together with Sheikh Khalid bin Abdullah bin Sultan Al Qasimi, chairman, Sharjah Ports and Customs, also inaugurated the third Egyptian Solo Show at Expo Centre Sharjah.

Ahmed Mohammed Al Midfa, chairman, Sharjah chamber, said at the event that the Arab world should unite through closer trade ties to withstand the challenges of globalisation.

Saudis seek funds for petrochem venture

Saudi Arabia is seeking international investment in a multi-million dollar joint venture petrochemical project near its Rabigh refinery on the Red Sea coast, a senior Saudi oil official said.

"The Rabigh refinery, currently a simple topping yet large refinery, offers the greatest potential platform for petrochemical development," said Abdullah Saadan, head of facilities planning at Saudi state oil company Aramco.

"It is an attractive opportunity for joint-venture participation," Saadan told an energy conference in Abu Dhabi this week. Reuters obtained a copy of his remarks.

Saadan did not give the project's cost but industry sources said the venture was worth hundreds of millions of dollars.

EU rejects Israeli attacks

A top EU official on Wednesday slammed Israel's destruction of Palestinian civilian infrastructure as "totally unacceptable", stressing that violence will not pave the way for an end to the bloodshed.

Jean Breteche, the European Commission representative to the West Bank and Gaza, compiled a list of EU-backed Palestinian projects destroyed by Israeli forces and which cost a total of more than 17 million euros.

He acknowledged that Israel had also suffered losses due to the 16-month Palestinian uprising against its occupation of large parts of the West Bank and Gaza Strip. But he said rather than establishing a commission, as Israel did this week, to assess the impact of the fighting on its economy, the best way out of the crisis was to tackle its root causes.

US presence worries Iran

Iran's defence minister said on Sunday his country was worried about the US presence in Afghanistan and dismissed as baseless US reports that Iran was interfering in Afghan affairs or harbouring Al Qaeda fighters.

Annan seeks Iran support

UN Secretary General Kofi Annan looked on Saturday to secure support from Iran for the reconstruction of Afghanistan, but avoided direct comment on allegations Iran has been arming Afghan warlords , a potential threat to the fragile interim government in Kabul.

Annan, speaking at a press conference with Iranian Foreign Minister Kamal Kharazi, praised Iran's "great support to the (Afghan) population," especially its 560 million dollar donation to the country after the Taliban's collapse.

Japan to help Oman fight water shortage

Japan is to provide Oman with the latest desalination technology to help fight water shortage in the Sultanate.

According to an agreement signed between Sultan Qaboos University and Japan's Water Re-use Promotion Centre (WRPC), a 200 cubic metre per day osmosis model plant will be built at the university's desalination facility to supply water for industrial and public use.

UAE investors playing key role in Egypt

UAE investors continue to be major contributors to Egypt's ongoing privatisation campaign, and the recent currency devaluation is expected to boost inflows this year, Dr Mukhtar Abdul Munem Khattab, Egypt's Minister of Public Works, said.

"We have several opportunities coming up in the tourism, hotels, property and real estate, agro-based and food processing sectors, and are holding talks with financial institutions and individual investors in this part of the world," he said.

The minister noted that the focus now is on privatising marginally profitable or loss-making industrial units, but there are also upcoming opportunities in the core agricultural sector in upper and southern Egypt, particularly in the Tushka and the Delta regions.

UAE, Egypt sign deal

The UAE and Egypt took a step forward towards boosting their joint co-operation in civil aviation industry.

Ahmed Humaid Al Tayer, UAE Minister of Communications, and his Egyptian counterpart Dr. Ibrahim Al Dumeiri, signed an agreement on air transport on the sideline of the two-day meeting of Arab transport ministers.

UN seeks urgent aid for Palestinians

The United Nations says it needs more than $100m immediately to fund emergency operations in the Palestinian territories.

Food and work programmes are at the top of the list of needs assessed by the United Nations Relief and Works Agency for Palestinian Refugees (UNRWA).

On top of annual funding of $300m a year, the UN agency says it needs an instant injection of another $117m to give food aid to families, provide short-term work to the unemployed and help children cope with the conflict.

Iran lashes out at Bush

Iran's supreme leader Ayatollah Ali Khamenei has denounced George W Bush, describing him as the bloodthirsty president of "the Great Satan".

His comments add to the fury expressed by other Iranian officials at President Bush's labelling of Iran, Iraq and North Korea as an "axis of evil".

But undaunted, Mr Bush on Thursday again warned countries the US suspects of developing weapons of mass destruction or sponsoring terrorism, telling them to "get their house in order."

"They need to know... our intention is to hold them accountable and the rest of world needs to be with us, because these weapons can be pointed at them as easily as us, and we cannot let terror and evil blackmail the United States or any other freedom-loving country," Mr Bush said.

Huge explosion at Kuwaiti oil facility

Firefighters are battling to put out a fire at an oil facility in the north of Kuwait. At least two contract workers were killed and another 17 people injured at the oil-gathering centre near the emirate's border with Iraq.

An official of the state-owned Kuwait Oil Company, which operates the facility, said the explosion was caused by a leak from a pipeline, and there were no suspicions of sabotage or terrorism.

Renewable energy department to be set up

The UAE Ministry of Electricity and Water plans to set up a renewable energy department within a year, a senior official stated.

The country may have been blessed with oil but that does not mean it does not have to look towards what power it will use in the future, pointed out Saud Al Humaidan, assistant deputy minister for technical affairs, Ministry of Electricity and Water.

The planned renewable energy department, which will either be based in Abu Dhabi or Dubai, will be a dedicated research and study centre, he explained.

It is being viewed as a "high priority, we are giving it a lot of attention", he added, without revealing the budget for the proposed department.

Abdullah leaves for U.S.

Jordan's King Abdullah left for Washington for crucial talks with U.S. President George W. Bush on the "complex" Israeli-Palestinian conflict, officials said.

King Abdullah will warn U.S. officials of the dangers of downgrading or suspending Washington's ties with Palestinian President Yasser Arafat and urge the return of a direct U.S. role in efforts to arrange a ceasefire between Israel and the Palestinians, they said.

Tower Records comes to Dubai

The entertainment retail industry is growing in Dubai thanks to a rush from international names to make their mark on the market.

Late last year, Virgin Megastore set up shop at Dubai City Centre, and last night the U.S. founded Tower Records opened at the Palm Strip Mall, Jumeirah.

The opening marks Tower Records first store in the Middle East.

But the group does not want to stop there it has an ambitious expansion plan in the works for the region.

Tower Records is bought to the region by a licence agreement with its parent company, MTS Inc, and Oases Entertainment Holdings Ltd (OEHL).

Thuraya in deal with Jumbo

Thuraya Satellite Telecommunications Co has entered an agreement with Jumbo Electronics under which the latter will market the handsets in the UAE.

The Thuraya handsets integrate satellite, GSM and GPS services. M.R. Chhabria, chairman of Jumbo Electronics, and Mohammed Hassan Omran, chairman of Thuraya, initialled the agreement.