"All of them [cartel members] said very strongly
they will comply and they will do it," said Qatari oil minister
It is the first time this year that Opec has decided
to change its production quotas.
And the decision is likely to anger consumer nations
who fear that higher oil prices will harm the process of economic
International oil prices soared following the cut.
New York's light sweet crude for delivery in January
rose 61 cents a barrel to $28.01 while Brent North Sea crude for January
delivery leapt 60 cents to $26.85 a barrel.
Oil prices have been kept high recently by the
national strike in Venezuela and the threat of a US-led war against
But the cartel is worried that crude oil prices could
collapse next year.
Recently, the cartel has been struggling because many
members are known to be producing much more than their quotas stipulate,
in an attempt to increase their revenue.
The risk in this for Opec - besides damaged
credibility - is that so much more oil reaches the market that it pushes
down prices sharply, possibly out of the cartel's preferred $22-28 a
barrel trading range.
Saudi Arabia urged its fellow members to ensure
greater discipline, thus restoring the cartel's credibility.
As well as cutting output, the cartel has also agreed
to raise its production quotas by 1.3 million barrels a day.
LEBANESE BANKS BAIL OUT GOVERNMENT
Lebanese banks have agreed to buy about $4bn
(£2.5bn) in interest-free government bonds in an attempt to help the
country deal with its crippling debt burden.
Lebanon's public sector has debts of about $30bn - or
almost 180% of gross domestic product - much of which was built up in
the course of development and reconstruction after the 1975-90 civil
Last month, Lebanon won pledges for $4bn in
low-interest loans from a number of international donors.
Prime Minister Rafiq Hariri has said that without the
injection of funds Lebanon would be forced to default next year on its
Without taking into account the latest moves, Lebanon
was paying an average of 13% interest on its borrowings - a level
commercial lenders have judged reflects the risk of default.
That level is expected to fall slightly, as Lebanon
uses fresh funds to retire its most costly debt.
The Lebanese central bank said banks would buy a
series of two-year euro-denominated bonds and six-month Lebanese pound
"The contribution arises because they would be
investing, in special treasury bills that bear a zero interest rate, up
to 10% of their deposits in Lebanese pounds and foreign
currencies," said central bank first vice-governor Nasser al-Saidi.
"Ten per cent of that net deposit base would be
This would reduce Lebanon's debt servicing
obligations by $400m a year, he added.
The chief of the country's banking association was
reported as saying the banks wanted to do their part to help the
GCC INCOME MAY FALL $4B ON OIL CUTBACKS
A series of oil production cuts intended to prevent a
price collapse will likely cost GCC around $4 billion this year as their
crude sales are projected to slide below $100 billion, according to
From nearly $101.7 billion in 2001, crude export
earnings by the UAE and its GCC partners will recede to around $97.9
billion in 2002 within an overall decline in the revenues of the
11-nation Opec, said the London-based Centre for Global Energy Studies (CGES),
which is owned by former Saudi Oil Minister Sheikh Ahmed Zaki Al Yamani.
As a whole, Opec's gross crude export sales are
projected to retreat to around $169 billion this year from $166 billion
in 2001, CGES deputy director, Leo Drollas, said. "The decline is
because of lower production by Opec...prices were slightly higher but
the increase was offset by the decline in supplies," he told Gulf
News by telephone.
IRAQ CANCELS RUSSIAN OIL DEAL
Lukoil, the Russian oil giant, has received a letter
from the Iraqi oil ministry cancelling a $3.7bn (£2.4bn) oilfield
The Russian company said it was surprised by what it
called an unwarranted move and said it would defend its interests in
Russia's economic interests in Iraq appear to have
been dealt a severe blow.
The huge Al-Qurnah oilfield was one of Lukoil's most
"We do not understand how a petty bureaucrat
from the oil ministry of Iraq can cancel a law which has been passed by
Iraq's parliament," a Lukoil spokesman said.
The multi billion dollar contract for its development
was signed in 1997.
But the UN oil embargo imposed on Iraq prevented
Lukoil from investing properly in the project.
IRAQ CUTS AUSTRALIAN WHEAT IMPORTS
Iraq has cut its wheat imports from Australia by
almost half, following Canberra's support for the US position on Iraq,
and is reported to be seeking fresh supplies from France.
Iraq is one of Australia's biggest wheat customers,
but threatened to reduce its order in July because Australia voiced
support for the possible US attacks on Baghdad.
The Australian Wheat Board (AWB), the country's main
wheat exporter, said Iraq had now reduced its order for 2003 by 44%.
The cut comes as Australian farmers suffer a severe
drought which has cost them 5bn Australian dollars (£1.8bn; $2.8bn) in
lost income and could halve this winter's grain harvest.
The AWB has said that Iraq would buy 1m tonnes of
wheat in 2003, compared with 1.8m in 2002.
IRAN ISSUES SECOND BOND DESPITE US SANCTIONS
Iran launched a 375 million euro bond, proving,
analysts said, that despite US sanctions it can now borrow at will on
the international markets.
The bond is the second this year by the country
dubbed by Washington in January as part of an "axis of evil",
and also the second since the 1979 Islamic revolution. Iran even
achieved lower borrowing costs in launching the 2008 bonds. Their 7.75
per cent coupon, was a point lower than its 625 million euro five-year
bond launched in July. Commerzbank and BNP Paribas managed both bond
At a launch price of 99.43 per cent of face value,
bond yields 423 basis points more than the euro-denominated benchmark,
the German government's OBL141.
IRAN DENIES SECRET NUCLEAR PLAN
Iran has rejected United States claims that it is
building two secret nuclear facilities which could be used in the
production of nuclear weapons.
United States officials, speaking on condition of
anonymity, said on the other day that two sites had been spotted in
commercial satellite photographs taken in September.
Both facilities, near the towns of Natanz and Arak in
central Iran, are of a type that could be used to help build a nuclear
weapon, the officials said.
Iran responded by saying its nuclear energy programme
was strictly for civilian use.
US CASH FOR MIDDLE EAST DEMOCRACY
The United States has launched a new initiative
designed to spread democracy, education and open markets across the
US Secretary of State Colin Powell pledged $29m to
the cause during a speech in Washington.
He described this initiative as a way of broadening
America's approach to the Middle East.
But the announcement has received a mixed welcome
from Arab officials.
Mr Powell's speech is widely seen as an attempt to
answer those who accuse Washington of favouring authoritarian
IRAQ SIGNALS FURTHER UN CO-OPERATION
Iraq says it is preparing a list of government
scientists UN inspectors may wish to interview in their mission to track
down any weapons of mass destruction.
However a senior Iraqi official said there had been
no formal request from the UN yet to provide names of those involved in
biological, chemical and nuclear programmes - although the matter had
been raised verbally.
WAR CRIMES ON SCREEN IN QATAR
The United States has for the first time allowed
journalists into one of its military bases in the tiny Gulf state of
Qatar, where a secret training exercise is under way.
Hundreds of coalition forces are involved in the
operation, code-named Internal Look.
Although the US military deny there's any connection to
events in Iraq, the exercise is widely seen as a rehearsal for a
possible war against Saddam Hussein's regime.
INCREASED ACTIVITY ON OTC
THE UAE market closed the week on a positive note
with the OTC market witnessing increased activity in select shares.
At the DFM, there was trading on five counters with
Emirates Bank International leading the volumes with 10 trades of 46,745
shares, which were value at over Dh0.94 million. The share price was up
20 fils to Dh20.25.
DH365M DEALS STRUCK AT CHINA FAIR
A total of Dh365 million worth of deals has been
finalised between local businessmen and companies with a number of
dealers and manufacturers participating in the ongoing Chinese
Commodities Fair at Expo Centre Sharjah and Chinamex complex in its
second day, revealed Hao Feng, Chairman, General Manager, Chinamex.
CENTRAL BANK TO ISSUE DH50 SILVER COIN
The Central Bank will issue tomorrow a commemorative
silver coin of Dh50 denomination on the occasion of the 20th anniversary
of the establishment of the Administrative Development Institute.
The face of the coin depicts the image of the
President, His Highness Shaikh Zayed bin Sultan Al Nahyan, along with
the denomination while the obverse carries the logo of the occasion.
The coin that comes with a diameter of 40 mm and
weighs 40 gms is an alloy of 92.5 per cent silver and 7.5 per cent
SEVEN PALESTINIANS, TWO ISRAELIS KILLED IN VIOLENCE
Seven Palestinians, five of them unarmed, and two
Israelis were killed in separate incidents in the Gaza Strip and the
West Bank city of Hebron. Violence surged as a senior US official held
talks with Israeli leaders on preparations for a possible US war on
Iraq. Washington has sought to keep a lid on Israeli-Palestinian
tensions while it seeks Arab support for such a campaign.
Israeli forces near the Karni border crossing in the
Gaza Strip killed five unarmed Palestinians they believed were planning
to climb a security fence to get into Israel, an Israeli military source
said. Palestinian security sources said the men were labourers trying to
sneak into Israel to find work.
US 'SATISFIED' BY YEMENI ASSURANCES
The United States says it was given assurances by
Yemen that weaponry intercepted en route from North Korea is for
defensive purposes only and won't be transferred to any other country.
US Secretary of State Colin Powell told reporters
that it was on that basis that the US had decided to let the vessel
carrying 15 Scud missiles and warheads proceed to Yemen.
US SIGNS MILITARY PACT WITH QATAR
The United States and Qatar have signed a military
pact that formally allows American forces to use military airbases in
the Gulf state. US Defence Secretary Donald Rumsfeld, who is currently
visiting Qatar, said the pact would improve America's military
CHINA TO SET UP CTV PLANT IN UAE
Several Chinese manufacturing projects are coming up
throughout the Middle East, including a Dh22 million ($6 million) colour
television plant in the UAE, a Dh55 million ($15 million) oil pipeline
flanges factory in Qatar, a Dh73.5 million ($20 million) cable unit in
Saudi Arabia, and an ambitious industrial park housing at least 10
producers of high-tech equipment in Bahrain.
QATAR IN $22M CNTRACTS
Sheikh Saoud bin Abdulrahman Al Thani, secretary
general of the Qatar National Olympic Committee, signed six major
contracts valued at $22 million, at QSi Expo recently.
The contracts form part of a development plan
announced earlier by Sheikh Saoud estimated to cost $1.8 billion.